11.1 Financial Management

For this activity:

You will need to use The Internet and to write down your answers in your Mahara e-portfolio.

In this theme you have learnt that every business organisation must raise capital, generate income, control expenses and aim to make a profit.

For the following questions, write your answers in an essay style including as much detail and examples to illustrate you points as possible. If you use any information you have seen on a website or other source, remember to include a reference to show that you have used someone else’s work.

Questions

1.       What are the two primary functions of the financial management of a firm?

2.       What are the four main financial objectives of a firm?

3.       What is meant by the term efficiency as it relates to the financial management of a firm?

4.       What is meant by the term stability as it relates to the financial management of a firm?

5.       What is the purpose of a forecast?

6.       On what factors or conditions do completely new firms base their forecasts?

7.       What is the purpose of an income statement?

8.       What are the three headings that receive the most attention when reviewing an income statement? Why are these headings and their values important?

9.       What is the purpose of a balance sheet?

10.     What are the major categories of assets and liabilities on a balance sheet? Briefly explain each category.