Module 1 Internal Finance Strategy Flashcards
1
Q
Finance Definition
A
Management of money and includes activities like investing, borrowing, lending, budgeting, saving and forecasting.
2
Q
Objective of financial management
A
Generate profits without taking unnecessary risks (maximise shareholder wealth)
3
Q
Three key finance functions
A
- Investment
- Financing
- Managing daily financial activities
4
Q
Investments may include money spent on what 5 things?
A
- Fixed assets
- New staff
- R&D
- Purchase of subsidary
- Down-sizing
5
Q
Three key financing condierations
A
- Timescales
- Flexibility
- Cost
6
Q
Six short and medium term financial objectives
A
- Maximising profits
- Minimising costs
- Growining earnings pre share
- Growining dividends
- Reducing long term bank borrowings
- Improving efficiency
7
Q
Five non financial objectives
A
- Become market leader
- Good trading relationships
- Address needs of employees
- Address needs of management
- Environmentaly friendly
8
Q
Relationship between shareholders and management?
A
Agency relationship
9
Q
Bonus should be related to?
A
- Increase in pre or post tax profits
- Increase in earnings per share
