Financial Management Notes Essay -- GCSE Business Management Studies

ROLE OF FINANCIAL vigilance- financial management is iodine of the functions of management-Financial management is concerned withoProfits and losings of operationsoControl over notesoEnsuring capture hard currency flow is availableoChas managemento peak funds / controlling internal fundsoInvestment of fundsoCost control / pricingoForecasting / bill financial performance against expectations-Accounting is a subset of financial management. Financial legal proceeding must be recorded, classified, stored and eventually reported to the managers.-OBJECTIVES OF FINANCIAL MANAGEMENToLiquidity Refers to cash reserves being held, or to the ability to release and investment into cash with little or no delay or loss of capitaloSolvency Refers to a business ability to stick out its debts when due, and remain a going concernoProfitability Refers to how useful the business is from the perspectives of profit on sales, assets and sh areholders equityoEfficiency Examines how easily working capital is managed, that is how quickly cash is collected from debtors, inventory inter change over and creditors paid.oGrowth Once a business is formed and operations commence, it enters a growth phase, where there should be an increase in the bit of goods or services sold-THE PLANNING CYCLEo strategical or corporate send offs involve how the business can accomplish its objectives, in general to create a strong competitive advantageoOrganisational readiness processes involveThe formulation of mission, goals and objectives,An analysis of key environmental variables that present opportunities, threats, and constraints. It is cognise as an environmental auditAn organisational audit to evaluate strengths and weaknesses and identify where change needs to be met The formulation of strategies within deadlines to achieve specific objectives supervise and review to ensure that the mission is on target and that performance indicators are being metoTactical plans focus on the most cos t-efficient resource use by a business unit or departmentoOperational plans are concerned with implementing the strategic plan through day to day processes, procedures, workflow and efficiencyoFinancial plans represent the dollar quantification of the stra... ...e lease agreement come to an end. Here the stress is on rental, rather than what is effectively deferred purchase.The slightee may be responsible for remunerative all or any of the maintenance, insurance operating costs etc factor in Is the selling of accounts receivable or debtors ledgers to a third party for less than the book valueSale and leaseback Refers to a transaction in which the trafficker retains the use of an asset such as occupancy of a building, by simultaneously signing a lease, with the purchaser of the asset at the condemnation of sale-EFFECTIVE FINANCIAL PLANNINGoEFFECTIVE CASHFLOW MANAGEMENTSource of funds = use (application) of fundsSources include Injection of unsanded capitalRaising new loansRedu ctions in stockApplications include repair out of loansTax paidPurchase of fixed assetsManagement strategies for cash flow problems includeShortening the operations cycleIncreasing nett profit marginsIncreasing trade payableBorrowing moneyMaintaining a minimum cash reserve