Financial Management Function (4) Flashcards
What are stakeholders?
Groups or individuals whose interests are affected by activities of a firm
Types of stakeholders classified as?
Internal, connected, external
What is meant by internal stakeholders?
Staff, managers
What is meant by connected staeholders?
Finance providers, customers, suppliers
What is meant by external staeholders?
Government, trade unions, pressure groups
What are shareholders normally?
The most important stakeholder group
Common stakeholder conflict in regards to pay?
Short-term conflict between achieving profit for shareholders and delivering pay rises to staff
Stakeholder conflict between different shareholder groups?
Some shareholders might have a preference for short-term dividends, others for long-term capital gain
Stakeholder conflict between different shareholders and external stakeholders?
Impact of a company’s activities may impact adversely on its environment (e.g. noise, pollution)
Stakeholder conflict between suppliers and customers?
May be disrupted by demands for changes to the terms of trade
Non-financial performance measures for staff?
Staff turnover (percentage of staff leaving during a year)
Non-financial performance measures for customers?
Liquidity ratios, complaints, market share
Non-financial performance measures for suppliers?
Payables (creditor) days
What are profitability ratios important for?
Important to assess managerial performance
What are debt ratios important for?
Important to banks
