Questions: 1, 2, 4, 5, 6, 7

1. Define the term ‘financial management’.

Financial management is the planning of how a business should earn and spend money.
2. Outline the benefits of developing a strategic plan as a part of a business’s financial
management
The benefit of developing a strategic plan enables you to track progress towards goals.
3. State, with examples the objectives of financial management.
4. Outline the relationship between short - term and long- term financial objectives.
Short – term objectives are typically liquidity and solvency. Long – term objectives are profitability,
efficiency, and growth.
5. Why are the financial functions critical to the long – term success of a business? In your
answer, refer to the interdependent nature of the key business functions.
It plays a significant role in most major decisions throughout a business.
6. Demonstrate potential conflicts between short – term and long – term financial objectives.
Delivering short term financial results, usually results in ignoring long term benefits.