Higher Business - Finance (1)

The Finance Department are responsible for:

• Ensuring all employees are working effectively across all areas.

• Ensuring that funds are available for the organisation to achieve it's objectives.

• Supporting the business to market their products and services effectively.

• Generating financial information for support decision making.

• Monitoring the levels of service that the organisation is delivering.

The finance department will complete various functions, such as:

• Creating job adverts for new vacancies in the organisation.

• Prepare budgets for departments to use.

• Dismiss staff if they do not stick to agreed budgets.

• Pay the salaries and wages of the employees.

• Work with the managers to increase the reputation of the business.

The source of finance that a business will use depends upon:

• The size of the business

• The sector they operate in

• How much money the competitors have

• The weather

• The town they operate in

Retained Profits is an example of:

• Internal Finance

• External Finance

• Unsensible Finance

• Long-Term Finance

The quickest source of finance available to a business is:

• Retained Profits

• Mortgage

• Bank Loan

• Sale of Assets

Short-term finance includes:

• Bank Overdraft

• Trade Credit

• Debt Factoring

• Mortgage

• Bank Load

The longer the terms of a Trade Credit agreement, the better the company's cash flow position...

• True

• False

• Don't be silly!

Debt Factoring is:

• Selling invoices to a factoring company.

• Factoring the amount of debt you have into your business plan.

• Writing off the debt that a business owe you.

• Making plans for the future of the business.

A bank loan can be a useful source of finance, because:

• It allows the business to plan better

• It is paid back with interest

• The payments are usually a fixed amount

When using Hire Purchase, the business does not own the item...

• True

• False