Finance syllabus A

Question 1

profitability management – cost controls – fixed and variable, cost centres, expense minimisation – revenue controls – marketing objectives

Answer 1

financial management strategies

Question 2

planning and implementing – financial needs, budgets, record systems, financial risks, financial controls – debt and equity financing – advantages and disadvantages of each – matching the terms and source of finance to business purpose

Answer 2

processes of financial management

Question 2

limitations of financial reports – normalised earnings, capitalising expenses, valuing assets, timing issues, debt repayments, notes to the financial statements

Answer 2

processes of financial management

Question 3

objectives of financial management – profitability, growth, efficiency, liquidity, solvency – short-term and long-term

Answer 3

role of financial management

Question 3

cash flow management – cash flow statements – distribution of payments, discounts for early payment, factoring

Answer 3

financial management strategies

Question 5

monitoring and controlling – cash flow statement, income statement, balance sheet

Answer 5

processes of financial management

Question 7

internal sources of finance – retained profits

Answer 7

influences on financial management

Question 8

influence of government – Australian Securities and Investments Commission, company taxation

Answer 8

influences on financial management

Question 9

financial ratios – liquidity – current ratio (current assets ÷ current liabilities) – gearing – debt to equity ratio (total liabilities ÷ total equity) – profitability – gross profit ratio (gross profit ÷ sales); net profit ratio (net profit ÷ sales); return on equity ratio (net profit ÷ total equity) – efficiency – expense ratio (total expenses ÷ sales), accounts receivable turnover ratio (sales ÷ accounts receivable) – comparative ratio analysis – over different time periods, against standards, with similar businesses

Answer 9

processes of financial management

Question 10

financial institutions – banks, investment banks, finance companies, superannuation funds, life insurance companies, unit trusts and the Australian Securities Exchange

Answer 10

influences on financial management

Question 11

interdependence with other key business functions

Answer 11

role of financial management

Question 12

ethical issues related to financial reports

Answer 12

processes of financial management

Question 13

strategic role of financial management

Answer 13

role of financial management

Question 14

working capital management – control of current assets – cash, receivables, inventories – control of current liabilities – payables, loans, overdrafts – strategies – leasing, sale and lease back

Answer 14

financial management strategies

Question 15

global market influences – economic outlook, availability of funds, interest rates

Answer 15

influences on financial management

Question 16

external sources of finance – debt – short-term borrowing (overdraft, commercial bills, factoring), long-term borrowing (mortgage, debentures, unsecured notes, leasing) – equity – ordinary shares (new issues, rights issues, placements, share purchase plans), private equity

Answer 16

influences on financial management

Question 17

global financial management – exchange rates – interest rates – methods of international payment – payment in advance, letter of credit, clean payment, bill of exchange – hedging – derivatives

Answer 17

financial management strategies