Selecting financial strategies

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

Card 2


Ways of raising finance


Borrowing, Selling shares and other sources of finance

Card 3




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Card 4


Selling shares


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Card 5


Other sources of finance


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