Business - Unit 5: Finance - 5.1

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  • 5.1 - Role of the finance function
    • The finance function is only a separate function in large businesses
      • Smaller businesses usually employ an accountant to check their finances
    • 1. Provide financial information
      • Costs / returns / profit / loss / ARR / profitability ratios
        • This data is needed because it is necessary in decision-making and is vital in tracking business success and financial health
      • This data is needed because it is necessary in decision-making and is vital in tracking business success and financial health
    • 2. Supporting business planning and decision-making
      • Help the business to choose what to invest in
      • The business plan needs to include data from the finance function to provide security for investors
        • Help the business to choose what to invest in
    • 3. Create financial accounts
      • e.g. cash flow statement - investors may want to see these before investing
    • 4. Keep financial records
      • e.g. cash flow statement - investors may want to see these before investing
      • These often have to be published online as well
    • 5. Analyse the financial performance
      • e.g. analyse efficiency to ensure the business is financial healthy

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