financial objectives

• finance is significant for

  • Business set up
  • Day to day trading
  • Growth & development
• financial objective - goals/target relating to financial performance, resources and structure of a business
• advantages of using financial objectives

  • focus for the business
  • reduces risks of failure
  • coordinates different business functions
  • key context for making investments
• main types of financial objectives

  • revenue
  • cost
  • profit
  • cash flow
  • investment
  • capital structure
• cost minimisation objectives - aims to achieve most cost effective way of delivering goods/services to required level of quality
• benefits of effective cost minimisation

  • lower unit cost
  • higher gross profit
  • higher operating profit
  • improved cash flow
  • higher ROI