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BUSS3
Revision
Booklet:
Strategies
for Success
By Lubna Sana Amir










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Functional objectives and strategies
Using objectives and strategies

Financial strategies and accounts
Understanding financial objectives
Using financial data to measure and assess performance
Interpreting published accounts
Selecting financial strategies
Making investment decisions

Marketing strategies
Understanding marketing objectives
Analyzing markets and marketing
Selecting marketing strategies
Developing and implementing marketing plans

Operational…

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Using objectives and strategies

Objectives ­ goals or targets that must be achieved

To be effective objectives should be:
S pecific
M easurable
A greed
R ealistic
T ime bound



Corporate objectives ­ the overall goals of the business to be
achieved in the longterm

What is the use of…

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The relationship between corporate and functional
objectives:
Corporate objectives vary depending on the size of the business
and the legal structure. Corporate objectives and their contributing
functional objectives may include the following

Survival. Functional objectives to achieve the businesses
survival may be appropriate levels of stock and required
number of…

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Minimize costs
Financial strategy
Introduce zero budgeting
Understanding financial objectives

Financial objectives ­ the specific, focused targets of the
finance and accounting function or department within an
organization

Types of financial objectives

1. Cashflow targets
Example: Spreading its costs more evenly. A business may
pay its utility bills, such as…

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4. Shareholder returns
A business must satisfy the needs of its owners/shareholders and
therefore have objectives to meet shareholders needs.
Example: Increasing the share price. The share price reflects
the value of the business so if the business retains its profits and
grows successfully, the share price should increase.
Influences…

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Using financial data to measure and assess
performance

The key financial documents kept by firms are:
Balance sheet
Income statement

Users Purpose
Internal users Managers use information to record
Managers financial activities, plan action, control
use of resources and analyze and
evaluate the effectiveness of decisions
taken.
Employees Employees can…

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Analyzing balance sheets

A balance sheet looks at the accumulated wealth of a
business and can be used to assess its overall worth.
The details provided in the balance sheet can help
stakeholders to assess the financial strength of a business.

Example

Summarised Financial Accounts for year ending 31 May…

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What causes working capital difficulties?
Failure to control inventory levels
Poor control of trade receivables/payables
Cash flow problems
Poor internal planning and coordination

How can you solve working capital problems?
Inventory control: ideally inventory should be maintained at a low level
as this means that less money is tied up…

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What is profit quality?
A measure of whether profit is sustainable in the long run
High quality profit is profit that will continue
Low quality profit arises from exceptional or extraordinary circumstances
that are unlikely to continue

What is profit utilization?
The way in which a business uses its profit…

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