Understanding financial objectives

Question	Answer
A financial objective	This is a target persued by the finance department within an organisation * It is likely to contain numerical element and also a timescale within which it is to be achieved
Cash flow	The money flowing in and out of the business
Cost minimisation	A financial strategy of cost minimisation entails seeking to reduce all the costs of production that a business has as a part of its trading activities to the lowest possible level
Return on capital employed (ROCE)	ROCE Is calculate by expressing the net profit made by a business as a % of the capital employed in the business
Shareholders returns	Shareholders returns are the combination of short-term returns such as current share price and any associated dividends as well as future share prices and dividends
Internal factors on financial objectives	* The corporate objectives of the business * The nature of the product that is sold * The attitudes ans aspirations of the business's senior management
External factors on financial objectives	The actions of the business's competitors The availability of external finance * The state of the market

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	Created by barbare.rukhadze about 9 years ago