Financial Management Notes Essay -- GCSE Business Management Studies

ROLE OF fiscal MANAGEMENT- monetary solicitude is one of the functions of management-Financial management is refer withoProfits and losses of operationsoControl over silveroEnsuring appropriate cash flow is availableoChas managementoRaising funds / controlling internal fundsoInvestment of fundsoCost control / pricingoForecasting / measuring pecuniary performance against expectations-Accounting is a subset of financial management. Financial actions must be recorded, classified, stored and eventually reported to the managers.-OBJECTIVES OF FINANCIAL MANAGEMENToLiquidity Refers to cash reserves being held, or to the ability to turn and investment into cash with little or no delay or loss of capitaloSolvency Refers to a descent ability to pay its debts when due, and remain a going concernoProfitability Refers to how profitable the stemma is from the perspectives of profit on sales, summations and shareholders equityoEfficiency Examines how well working capital is managed, that i s how quickly cash is tranquil from debtors, inventory sold and creditors paid.oGrowth Once a concern is formed and operations commence, it enters a growth phase, where there should be an change magnitude in the number of goods or services sold-THE PLANNING musical rhythmoStrategic or corporate plans involve how the business tush accomplish its objectives, generally to create a strong competitive serviceoOrganisational planning processes involveThe formulation of mission, goals and objectives,An analysis of key environmental variables that present opportunities, threats, and constraints. It is known as an environmental auditAn organisational audit to respect strengths and weaknesses and identify where change needs to be met The formulation of strategies within deadlines to hit specific objectivesMonitoring and review to ensure that the mission is on chump and that performance indicators are being metoTactical plans focus on the most efficient resource use by a business unit or departmentoOperational plans are concerned with implementing the strategic plan through day to day processes, procedures, workflow and qualificationoFinancial plans represent the dollar quantification of the stra... ...e lease agreement espouse to an end. Here the emphasis is on rental, rather than what is effectively deferred purchase.The lessee may be responsible for paying all or any of the maintenance, insurance operational costs etcFactoring Is the selling of accounts receivable or debtors ledgers to a triplet party for less than the book valueSale and leaseback Refers to a transaction in which the seller retains the use of an asset such as business of a building, by simultaneously signing a lease, with the purchaser of the asset at the time of sale-EFFECTIVE FINANCIAL PLANNINGoEFFECTIVE CASHFLOW MANAGEMENTSource of funds = use (application) of fundsSources involve Injection of new capitalRaising new loansReductions in investment trustApplications includePay out of loansTax paidPurchase of better assetsManagement strategies for cash flow problems includeShortening the operations passIncreasing net profit marginsIncreasing trade payable borrowing moneyMaintaining a minimum cash reserve