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Financial Objectives

Financial Objectives. A2 Business Studies. Aims and Objectives. Aim: To understand financial objectives. Objectives: Define financial objectives Explain the internal and external influences on financial objectives. Analyse the internal and external influences on financial objectives .

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Financial Objectives

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  1. Financial Objectives A2 Business Studies

  2. Aims and Objectives Aim: • To understand financial objectives. Objectives: • Define financial objectives • Explain the internal and external influences on financial objectives. • Analyse the internal and external influences on financial objectives. • Evaluate the trade off between shareholder and employee satisfaction.

  3. Starter Q) Define a financial objective Goal or target set and/or pursued by the finance department or function. Usually be SMART.

  4. Financial Objectives

  5. Internal and External Influences on Financial Objectives • Brainstorm in groups the internal and external factors which influence a businesses’ financial objectives.

  6. Internal Influences on Financial Objectives

  7. External Influences on Financial Objectives

  8. Shareholders & Managers • Split into groups – shareholders and managers of ASDA. • Decide on 4 objectives you wish to be achieved by ASDAas either a mangeror a shareholder.

  9. Conflict Between Objectives

  10. Divorce of Ownership & Control Shareholders Managers Incentivised by money. Bonuses/performance related pay. May seek market size in terms of output, employment and sales rather than profitability. • Interested in profit maximisation and dividends. • Only interested in managers making profits. However, managers want to signal to shareholders that they are performing well and so chose not to profit maximise but to profit satisfice(just enough to satisfy shareholders).

  11. Employee or Shareholder Satisfaction? • Briefly explain how internal influences affected the financial objectives of Optical Excellent PLC. • How might external influences have affected the workers attitudes towards their pay?

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