TOPIC 3: FINANCE

Role

Influences

Processes

Strategies

Role of Financial Management

• strategic role of financial management
• objectives of financial management

               - profitability, growth, efficiency, liquidity, solvency
               - short-term and long-term

• interdependence with other key business functions

Strategic role

Financial Management – the planning and monitoring of an organisation’s financial resources to enable the organisation to achieve its financial goals.

Financial Resources – the resources of a business that have a monetary or money value. 

Objectives of financial management

Tutor2u has excellent introductory information for financial management:

• Using financial accounts to assess business performance
• Internal and external influences on financial objectives

TASK:

1. Explain the objectives of financial management.
2. Explain how objectives of financial management may conflict with each other.

Interdependence

http://www.flickr.com/photos/epublicist/8718123610/ by Yoel Ben-Avraham

TASK: Describe how the other key business functions (KBFs) depend on financial management. Hint: Finance is about money, so each KBF needs to negotiate with Finance for their spending budget, and, of course, Marketing needs to interact with Finance regarding Price (Revenue = Quantity x Price).

Influences