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Questions and Answers
What is the primary aim of financial management?
What is the primary aim of financial management?
Which of the following is an example of a tangible asset?
Which of the following is an example of a tangible asset?
According to B.O. Wheeler, what does business finance primarily concern?
According to B.O. Wheeler, what does business finance primarily concern?
What determines eligibility for many financial opportunities, including loans?
What determines eligibility for many financial opportunities, including loans?
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What is a recommended strategy to avoid damaging credit?
What is a recommended strategy to avoid damaging credit?
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What is a key component of successful credit management for first-time entrepreneurs?
What is a key component of successful credit management for first-time entrepreneurs?
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What should a company budget present?
What should a company budget present?
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Which action is essential for companies to survive financially?
Which action is essential for companies to survive financially?
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Study Notes
Financial Management
- Financial management involves optimizing the use of limited financial resources to achieve organizational goals, as resources are always limited but wants are unlimited.
Purpose of Finance
- Finance is necessary for acquiring various assets, including:
- Tangible assets (e.g., machinery, factories, buildings)
- Intangible assets (e.g., trademarks, patents)
Definition of Business Finance
- Business finance refers to activities concerned with acquiring and conserving capital funds to meet financial needs and overall business objectives (according to B.O. Wheeler).
Understanding Credit
- Credit is a vital financial concept for business success.
- A good credit rating determines eligibility for financial opportunities, including loans.
- Credit is an abstract representation of financial responsibility, and it's essential to maintain a strong credit score.
- Building credit takes time, especially for first-time entrepreneurs with limited financial history.
- Strategies for building credit include:
- Consistent credit management
- Avoiding errors that could damage credit
- Monitoring credit scores regularly
- Setting up auto-pay for bills to avoid late payments
- Avoiding ventures with high interest rates
- Alternative options for obtaining capital exist for those without ideal credit ratings.
Learning How to Budget
- A company budget should provide a comprehensive picture of finances.
- Accurate and regular financial record-keeping is crucial for business survival.
- Companies should:
- Keep accurate financial records
- Review financial records regularly
- Ensure complete financial transparency.
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Description
This quiz covers the basics of financial management, purpose of finance, and definition of business finance for first-year BCom entrepreneurship students at Thakur College of Science and Commerce, Mumbai.
