https://padlet.com/mrsdloughran/financialobjectives en-us 2017-10-10 04:35:33 UTC 2025-12-20 18:48:38 UTC hello@padlet.com mrsdloughran https://padlet.com/mrsdloughran/financialobjectives/wish/195834658 Liquidity
Profitability
Efficiency
Growth
Solvency]]> 2017-10-10 22:51:27 UTC https://padlet.com/mrsdloughran/financialobjectives/wish/195834658 mrsdloughran https://padlet.com/mrsdloughran/financialobjectives/wish/195834788
Define it - what is it?
Describe - what does it require the business to do?
Demonstrate - provide an busiess example]]> 2017-10-10 22:52:46 UTC https://padlet.com/mrsdloughran/financialobjectives/wish/195834788 https://padlet.com/mrsdloughran/financialobjectives/wish/195841609 Definition: Solvency is the ability of the business to meet its financial obligations in the long term; that is greater than 12 months.  

What does it do? 
Borrowed (debt)  finance may be used to  purchase expensive assets such as machinery or a factory that is needed by the business. These assets will be  used to earn revenue through the production and sale of outputs and hopefully generate more than enough profit to repay the loans. 

Example of Solvency  
The process of solvency is apparent in the situation of the newly established SME Burger Queen, as they requested a extensive loan from the bank which was used to purchase expensive assets such as machinery that are vital for the successful operations of the business.]]> 2017-10-10 23:49:41 UTC https://padlet.com/mrsdloughran/financialobjectives/wish/195841609 https://padlet.com/mrsdloughran/financialobjectives/wish/195841904 Profitability refers to the earnings of the business after expenses have been paid. As profitability is the most recognisable financial objective, nearly all businesses will seek to increase profit through increased sales against decreased costs. Business chains such as Nike, reduces their expenses by sourcing their products overseas to manufacture these items at a cheaper price, subsequently, inflating the price to achieve greater profitability. ]]> 2017-10-10 23:52:19 UTC https://padlet.com/mrsdloughran/financialobjectives/wish/195841904 https://padlet.com/mrsdloughran/financialobjectives/wish/195841908 2017-10-10 23:52:22 UTC https://padlet.com/mrsdloughran/financialobjectives/wish/195841908 https://padlet.com/mrsdloughran/financialobjectives/wish/195841937 Growth is the businesses  ability to grow its physical size. This can be achieved if the business expands into a larger office or factory. Growth in a business will result in the business having increased profits and sales. If a business grows too fast, it could cause liquidity or cash flow problems. 

 ]]> 2017-10-10 23:52:35 UTC https://padlet.com/mrsdloughran/financialobjectives/wish/195841937 https://padlet.com/mrsdloughran/financialobjectives/wish/195841992 Define:
Liquidity is a measure of how quickly a current asset including stocks and accounts receivable may be converted into cash and therefore determines the ability of the business to pay short term debts as they fall due.
Describe:
Liquidity requires the financial manager of the business to effective balance the ratio between debts and liquid. Also, in order to pay business creditors current assets may be sold to convert into cash.
Demonstrate:
The financial managers of  KLA Pty Ltd were cautious and spent less money in inventory/stock in order to reduce the storage cost. In turn, this increases the cash available in the KLA Pty Ltd bank account. Therefore, KLA Pty Ltd can afford to pay either the bank overdraft or creditors and will still have cash left overs.


]]> 2017-10-10 23:53:01 UTC https://padlet.com/mrsdloughran/financialobjectives/wish/195841992 https://padlet.com/mrsdloughran/financialobjectives/wish/195842058 A business can increase its profitability by increase its revenue. To achieve that the business owner may need to increases sales, this can be done with introducing new products or discounts which can get the customers to make purchase in your business. The business may also decrease its expenses as this could increases the revenue.]]> 2017-10-10 23:53:29 UTC https://padlet.com/mrsdloughran/financialobjectives/wish/195842058 https://padlet.com/mrsdloughran/financialobjectives/wish/195842460 Business Example - Fitbit is a business that started in 2009 they produced a small device that senses movement of people. There business is growing due to the increase in sales and profits as they are expanding the business's range of products.]]> 2017-10-10 23:57:01 UTC https://padlet.com/mrsdloughran/financialobjectives/wish/195842460 https://padlet.com/mrsdloughran/financialobjectives/wish/195842588 Definition : Efficiency is related to profitability because a business will be able to increase its profit hence it can decrease its cost.
What does it do?
Efficiency may be calculated using an expense ratio, such as total expenses divided by total sales. Efficiency is also gained if a business can achieve the small lelvel of profit from a smaller amount of inputs. 

Example of Efficiency 
This is shown in the local Burger business in Yeoval makes burger for 24 cents but sells for $8.]]> 2017-10-10 23:58:19 UTC https://padlet.com/mrsdloughran/financialobjectives/wish/195842588