Selecting financial strategies

HideShow resource information
A financial strategy
medium - long term plan designed to achieve the objectives of the financial function or department of a business
1 of 15
Ways of raising finance
Borrowing, Selling shares and other sources of finance
2 of 15
Borrowing
Borrow funds from banks. = simple, regular interest payments
3 of 15
Selling shares
Managers may choose to sell shares to a business = slower and expensive
4 of 15
Other sources of finance
Hold current assets in other companies that can be sold to raise funds for investment in B.S
5 of 15
Profit centers
An area of business that controls itself seperately from the larger organisation
6 of 15
Why could this be a good financial strategy
More accurate decision making, monitor budgets, delegate power = imporve motivtion
7 of 15
Cost minimisation
Reduce costs throughout the whole of the business while still trying to maintain a high quality standard
8 of 15
Ways to minimise costs...
Reduce labour costs, Relocation and using technology
9 of 15
Reducing labour costs
Wage and salary expenses are large chunks of a business
10 of 15
Relocation
Move to eastern europe or Asia = reduce overheads and labour costs
11 of 15
Technology
Reduce staff numbers
12 of 15
Capital expenditure
Spending on new non-current assets - property, machinery or vehicles
13 of 15
Investing in machinery
= Reduce labour costs, initial costs are high = training costs
14 of 15
Investment in property
Able trading o be as efficient as possible to support their corporate image
15 of 15

Other cards in this set

Card 2

Front

Ways of raising finance

Back

Borrowing, Selling shares and other sources of finance

Card 3

Front

Borrowing

Back

Preview of the front of card 3

Card 4

Front

Selling shares

Back

Preview of the front of card 4

Card 5

Front

Other sources of finance

Back

Preview of the front of card 5
View more cards

Comments

No comments have yet been made

Similar Business Studies resources:

See all Business Studies resources »See all Financial Planning resources »