Mastering Finance - HSC Business Studies Topic 3

This student topic book has explanatory notes on the HSC Business Studies topic Finance.

Its purpose is to provide a concise, yet comprehensive coverage of the Finance topic in the HSC Course. Students are advised to seek other references and case studies in this subject because it is important to read as widely as possible in order to get the most from your study of the topic.

As far as possible, the material is presented in the same order as the Board of Studies syllabus.

Contents

3.1 The Role of Financial Management

• The Strategic role of financial management
• The objectives of financial management

3.2 Influences on Financial Management

• Internal sources of finance – retained profits
• External sources of finance
• Financial institutions : banks, investment banks, finance companies, superannuation funds, life insurance companies, unit trusts and the Australian Securities Exchange
• Influence of government: Australian Securities and Investment Commission, company taxation
• Global market influences such as the economic outlook, availability of funds and interest rates

3.3 Processes of Financial Management

• Planning and implementing – financial needs, budgets, record systems, financial risks and financial controls
• Limitations of financial reports – normalised earnings, capitalising expenses, valuing assets, timing issues, debt repayments, notes to the financial statements
• Ethical issues related to financial reports

3.4 Financial Management Strategies

• Cash flow management
• Profitability management
• Global financial management