Financial Objectives

Question 1

What is a financial objective

Answer 1

A goal or target perused by the finance department within an organisation

Question 2

What is capital

Answer 2

The money owners invest in a business

Question 3

Likely financial objectives

Answer 3

• ROCE (return on capital employed) - HIGHER the BETTER
• shareholders returns
• cost minimisation
• cash flow target

Question 4

Internal influences on financial objectives

Answer 4

Corporate objectives
Resources avaliable
Nature of the product that is sold

Question 5

External influences on financial objectives

Answer 5

Action of other businesses
Market factors
PESTLE
Suppliers