5.1 THE ROLE OF THE FINANCE FUNCTION

• WHAT IS FINANCE?

  • MANAGEMENT of MONEY within a business
  • Ensures that MONEY is not WASTED
• THE PURPOSE OF THE FINANCE FUNCTION:

  • To provide FINANCIAL information
  • To support business PLANNING
  • To support DECISION making
• FUNDING:

  • Business should have ENOUGH money to continue TRADING
• COMPLIANCE:

  • LAWS & TAXES must be adhered to
• ACCOUNTING:

  • Financial STATEMENT provided at the END of each TAX year
• MANAGEMENT & CONTROL

  • PRODUCES & USES financial information- to meet OBJECTIVES
• INCOME STATEMENT:

  • Shows the business' REVENUE and PROFIT
• BALANCE SHEET:

  • Shows what the business OWNS & OWES