INFLUENCES ON FINANCIAL OBJECTIVES Flashcards
What are corporate objectives
A good financial objective should spring from the corporate objective, to enable the business to achieve its goal.
What are finances available
The amount of retained profit that a business has. If the business needs to expand, the owners will need to consider if they have enough retained profit. They’ll also have to consider if they need to become more risky, by taking on more loans from the bank.
What are marketing objectives
Marketing objectives - Diversification and growth VS survival (these businesses may have different methods of marketing.
What are operations objections
Operations objectives - Are they looking to produce a new produce (requires investment in capital) or are they looking to cut unit costs (raw materials, packaging etc)
What are people
People - Workforce flow and planning - recruitment, training and outflow
What can these influences effect
PESTLE (and competition)
What are external influences
Political - Changes to government policy like education may mean businesses need to invest more in training its staff.
Economic - Changes in interest rates can have a huge impact on a businesses debts. Consumer confidence will affect revenues.
Social - Changes in shopping habits, including the move to online, which requires businesses to be more flexible.
Technology - Advances in technology require investment (training staff & the costs of the technology), but in the long run it will be a good decision for the business, as it can cut the businesses costs.
Legal - Adhering to changes in legislation, such as minimum wage - That can be costly
Environmental - Cutting waste and becoming more efficient can help a business to manage its costs - It may cost the business more to invest into raw materials that are good for the environment.
Competitors - The competitiveness of the industry determines revenues and costs
