Podcast
Questions and Answers
Which of the following is NOT directly facilitated by objective setting in a business enterprise?
Which of the following is NOT directly facilitated by objective setting in a business enterprise?
- Defining the plans of the company.
- Defining the structure of strategies.
- Determining employee compensation. (correct)
- Defining the policies of the company.
What broad objective could a company set to establish itself competitively within its market?
What broad objective could a company set to establish itself competitively within its market?
- To diversify product offerings to capture a larger market share.
- To minimize operational costs below industry standards.
- To become a leader in technology within the industry. (correct)
- To strictly adhere to existing market practices.
Which broad objective aligns most closely with enhancing customer loyalty and satisfaction?
Which broad objective aligns most closely with enhancing customer loyalty and satisfaction?
- Reducing marketing expenditures.
- Increasing product prices to reflect added value.
- Maximizing short-term profits.
- Achieving a high degree of customer satisfaction. (correct)
Which of these activities falls under the investing responsibilities of a Finance Manager?
Which of these activities falls under the investing responsibilities of a Finance Manager?
A Finance Manager is deciding on the optimal mix of debt and equity. Under which area of responsibility does this fall?
A Finance Manager is deciding on the optimal mix of debt and equity. Under which area of responsibility does this fall?
Which of the following reflects an operating responsibility of a Finance Manager?
Which of the following reflects an operating responsibility of a Finance Manager?
What is the primary importance of setting objectives in a business enterprise?
What is the primary importance of setting objectives in a business enterprise?
Which of the following is an example of a primary financial objective for a business firm?
Which of the following is an example of a primary financial objective for a business firm?
Which responsibility falls under the domain of a Finance Manager regarding financial objectives?
Which responsibility falls under the domain of a Finance Manager regarding financial objectives?
A company aims to become known for its innovative products. How would it define this objective?
A company aims to become known for its innovative products. How would it define this objective?
A Finance Manager evaluates investment proposals. What type of responsibility is this?
A Finance Manager evaluates investment proposals. What type of responsibility is this?
A company decides to issue bonds to raise capital. Which function is the Finance Manager performing?
A company decides to issue bonds to raise capital. Which function is the Finance Manager performing?
Ensuring that the firm has enough cash to cover its short-term liabilities is part of which responsibility?
Ensuring that the firm has enough cash to cover its short-term liabilities is part of which responsibility?
Which decision is NOT part of the investing responsibilities of a Finance Manager?
Which decision is NOT part of the investing responsibilities of a Finance Manager?
Which of the following is NOT a typical financing responsibility of the finance manager?
Which of the following is NOT a typical financing responsibility of the finance manager?
Which task is least likely to be an operating responsibility of a Finance Manager?
Which task is least likely to be an operating responsibility of a Finance Manager?
Which action is LEAST aligned with managing a firm's working capital?
Which action is LEAST aligned with managing a firm's working capital?
What is the process of Prioritization of investment alternatives?
What is the process of Prioritization of investment alternatives?
How the company obtains and manages the financing it needs to support its investments comes under of which responsibilities?
How the company obtains and manages the financing it needs to support its investments comes under of which responsibilities?
What are the key objectives in the business?
What are the key objectives in the business?
Flashcards
Objective setting
Objective setting
An important phase where strategies, policies, and plans are structured.
Broad business objectives
Broad business objectives
To be a leader in technology, achieve high profits through manufacturing efficiency, customer satisfaction.
Investing
Investing
Managing company's total assets and allocating available funds.
Investing examples
Investing examples
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Financing Decisions
Financing Decisions
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Operating
Operating
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Working Capital Issues
Working Capital Issues
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Study Notes
Importance of Objective Setting
- Objective setting is a critical phase for a business enterprise
- Correct objective setting defines the entire structure of strategies, policies and plans
- Objectives can be stated broadly, e.g.:
- To be a technology leader in the industry
- To achieve profits through high-level manufacturing efficiency
- To achieve a high degree of customer satisfaction
Responsibilities of a Finance Manager: Investing
- Involves managing company assets and fund allocation
- Investing decisions include:
- Evaluating and selecting capital investment proposals
- Determining the total investment amount a firm can commit
- Prioritizing investment alternatives
- Allocating funds and its rationing
- Determining investment levels in working capital like inventory, receivables, cash, and marketable securities
- Determining which fixed assets to acquire
- Making asset replacement decisions
- Making purchase or lease decisions
- Restructuring through reorganization, mergers, and acquisitions
- Performing securities analysis and portfolio management
Responsibilities of a Finance Manager: Financing
- Includes how a company obtains and manages financing to support investments
- Finance decisions involve:
- Determining the financing pattern of short-term, medium-term, and long-term funds requirements
- Determining the best capital structure or mix of debt and equity financing
- Procuring funds through issuing financial instruments like equity shares, preference shares, bonds, and long-term notes
- Arranging with bankers, suppliers, and creditors for working capital, medium-term, and other long-term fund requirements
- Evaluating alternative funding sources
Responsibilities of a Finance Manager: Operating
- Ensures the firm has sufficient resources to continue operations without costly interruptions
- Resolving issues related to managing a firm’s working capital, such as:
- Determining the level of cash, securities, and inventory that should be kept on hand
- Deciding the credit policy, including whether to sell on credit and, if so, what terms should be extended
- Determining the source of short-term financing, including whether to borrow in the short term and how/where to borrow
- Financing goods purchases: should the firm purchase raw materials/merchandise on credit, or borrow in the short-term and pay with cash
Test Your Knowledge - Investing
- Evaluation of alternative sources of funds, is NOT an Investing responsibility of the finance manager.
Test Your Knowledge - Financing
- Financing purchases of goods is NOT a Financing responsibility of the finance manager
Test Your Knowledge - Operating
- Purchase or lease decisions is NOT an Operating responsibility of the finance manager
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