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[FINANCIAL STRATEGIES AND ACCOUNTS] BUSS3 - AQA

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[FINANCIAL STRATEGIES AND ACCOUNTS] BUSS3 - AQA




Understanding Financial Objectives
Financial Aims: the broad, general goals of the finance and accounting function or
department within an organisation.
Financial Objectives: the specific, focused targets of the finance and accounting
department within an organisation.
Financial Strategies: long-term or medium term plans, devised…

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[FINANCIAL STRATEGIES AND ACCOUNTS] BUSS3 - AQA



ROCE Targets
The success of a business is invariably demonstrated by its profit levels. Clearly, large
firms will achieve higher profit levels than smaller businesses, so the profit needs to
be compared to the size of a business. E.g.
- Achieve an ROCE…

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[FINANCIAL STRATEGIES AND ACCOUNTS] BUSS3 - AQA


Internal Influences on Financial Objectives
Internal factors that affect financial objectives are those within a business, such as
its workforce, resources and financial position.

Corporate Objectives:
The overall aims of an organisation are a key influence on the objectives of a
functional area,…

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[FINANCIAL STRATEGIES AND ACCOUNTS] BUSS3 - AQA


External Influences on Financial Objectives
External factors are those outside the business, such as the state of the economy
and the actions of competitors. PESTLE describes external factors that can affect a
business.

Political Factors:
Financial objectives are often guided towards the wishes…

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[FINANCIAL STRATEGIES AND ACCOUNTS] BUSS3 - AQA



Using Financial Data to Measure and
Assess Performance
Two key financial documents kept by a firm are:

Balance Sheet
- A document describing the financial position of a company at a
particular point in time, by comparing items owned by the company
(assets)…

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[FINANCIAL STRATEGIES AND ACCOUNTS] BUSS3 - AQA


Balance Sheets
The balance sheet looks at the accumulated wealth of the business and can be used
to assess its overall worth. It lists the resources that a business owns and the items
it owes.
In addition, it shows the capital provided by…

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[FINANCIAL STRATEGIES AND ACCOUNTS] BUSS3 - AQA



An income statement describes the income and expenditure of a business over a
given period of time.

Purpose of the profit and loss account ­

o Regular calculations of profit throughout the year help managers to review
progress before the final end-of-year accounts…

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[FINANCIAL STRATEGIES AND ACCOUNTS] BUSS3 - AQA


Liquidity ­ the ability to convert an asset into cash without loss or delay

The working capital shows the net current assets of a firm. It is the day-to-day
finance used in a business, consisting of current assets minus current liabilities. It is…

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[FINANCIAL STRATEGIES AND ACCOUNTS] BUSS3 - AQA


Failure to control inventory levels
Poor controls of receivables
Poor controls of payables
Cash flow problems
Poor internal planning and coordination
External factors



Solving problems:

Inventory control - Low inventory levels mean no storages costs, however
you miss out in purchasing economies of…

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