2.02 student notes

Marketing Management Objective 2.02
 What is financial information?
 ____________________________________________ is information required to support
financial decisions or to meet financial requirements.
 __________________________________________is the activity within an organization
that provides much of the raw financial information.
 ___________________________________________ can be defined as: "The recording of
________________________________ over a period of time and the communication of
the resulting information to ____________________________."
 Financial Information Should Be…
 _______________________________ – provides true information
 _______________________________ – fully disclosed and accurate
 ___________________________ (prepared daily, monthly, quarterly, annually)
Also, timely information gives feedback showing what has happened and/or helps predict
what will happen
Financial Information Should Be…
 __________________________________ - logical, makes sense to readers
 __________________________________ – information can be measured and
reported in a similar manner like other businesses.
 _________________________________ – gives the same result each time, presents
what really happened.
Who is responsible for maintaining financial information?
 Bookkeeper
 _____________________________________________
 Finance director
 _____________________________________________
 Company secretary
How do managers use financial information?
 Provides _____________________________ with data needed to determine
whether a business is at a _________________________or a profit, how much
___________________________________ owe, how much a
_________________________ owes others, and other financial information.
 Helps managers create:
 _______________________________________
 _______________________________________
 ______________________________from execution of the strategy
How is financial information useful in identifying trends?
 ____________________________ – The direction in which something is moving.
 Types of trends that financial statements can show –
 _________________________________________________
 profit or loss
 _________________________in costs and expenses, assets and liabilities
 Helps a business see its current financial state and make predictions about its future
 How is financial information useful in contracts?
An important specific role of financial statements is that they are used in ______________________
and ________________________________________.
For example:
A limit to the amount that a company may ________________ may be based on
_______________ taken from the ___________________, such as gearing, interest
cover or other measures. If such limits are breached, various consequences may
arise including the debt being ____________________________.
In an agreement for the ______________________ of a subsidiary, the price to be
paid may include an ___________________________ plus a further amount of
contingent consideration that may be payable depending on the level of profits in
the period (typically ______________________ years) after the sale.
Part of the ________________________________, manager or group of employees
may be based on an accounting measure such as _________________ in (or
absolute amount of) a measure of profit such as ___________________, pre-tax
profit, __________________________ or _________________________.
 How does financial data aid in accounting?
 Business wants to know the _____________________________ or
__________________________ during the year and its financial position at the end
of the year. This is disclosed by _____________________________ and the balance
sheets. ___________________________________________ provide necessary data
for preparing these statements.
 How does analysis of financial data aid in verifying information?
 Financial information and data are needed for ______________________________,
planning, ____________________________ and forecasting.
__________________________________maintained by book-keeping are the source
of such information.
 _______________________________________ are regarded by the tax authorities
as ____________________________ and ____________ for determining tax liability.
 How does financial data aid in determining variance?
 It provides the__________________________ needed to compare figures.
 It provides the data needed to determine the_______________________________ .
 The ______________________________ is the difference in the planned financial
outcomes (from the budget) and the actual financial outcomes.
 How does financial data guide financial decision making?
 The finance department of a company generates a variety of financial information
that is helpful in decision making, including:
 ________________________________________ providing details of whether
the business is making efficient use of financial resources.
 _________________________________________ providing details of a
business’ assets and liabilities, as well as the ________________________ of
the business.
 How does financial data guide financial decision making?
 ________________________________________ about particular types of trading
and accounts with particular customers and suppliers.
 Information about the purchase of ______________________________________.
 Information about the ___________________________ paid out by a business.
 Information about _________________________________.
 How does financial data guide financial decision making?
 By providing a steady and up-to-date flow of information, a business is able to make
appropriate decisions about:
 ___________________________________________
 how to increase sales
 ____________________________________________
 when to purchase new capital assets
 _____________________________________________.