BMAL 590 Business Finance (Latest 2024/ 2025 Update)
Qs & As|| 100% Correct| Grade A (Verified Answers)
Financial resources - ANSWERresources in a business that have a monetary or money
value
Financial management - ANSWERplanning and monitoring of a business's financial
resources to enable the business to achieve its financial goals
Assets - ANSWERproperty and other items such as machinery, vehicles and cash
(tangible assets) and patents, trademarks and goodwill (intangible assets)
Objectives of Financial management (5) - ANSWER1. Profitability
2. efficiency
3. growth
4. liquidity
5. solvency
Profitability - ANSWERability of a business to maximise its profits
Growth - ANSWERability of a business to increase its size in the longer term
Efficiency - ANSWERability of a business to use its resources effectively in ensuring
financial stability and profitability
Liquidity - ANSWERextent to which a business can meet its financial commitments in
the short term
Solvency - ANSWERextent to which the business can meet its financial commitments
in the longer term
Short term objectives - ANSWER1-2 years tactical plans
Long term objectives - ANSWERstrategic plans 5+ years
Internal finance - ANSWERfunds provided by the owners of the business or from the
outcomes of business activities (retained earnings)
Owners' equity - ANSWERfunds contributed by owners or partners to establish and
build the business
External finance - ANSWERfunds provided by sources outside of the business,
including banks, other financial institutions, government, suppliers or financial
intermediaries
, Bank overdraft (ST) ` - ANSWERbank allows a business or individual to overdraw their
account up to an agreed limit and for a specified time, to help overcome a temporary
cash shortfall
Commercial bills (ST) - ANSWERtype of bill of exchange (loan) issued by institutions
other than banks
Bill of exchange - ANSWERdocument ordering the payment of a certain amount of
money at some fixed future date
Factoring (ST) - ANSWERselling of accounts receivable for a discounted price to a
finance or factoring company
mortgage (LT) - ANSWERloan secured by the property of the borrower
Debentures (LT) - ANSWERissued by a company for a fixed rate of interest and for a
fixed period of time
Unsecured note (LT) - ANSWERloan for set period of time but is not backed by any
collateral or assets
Leasing (LT) - ANSWERpayment of money for the use of equipment that is owned by
another party
Equity - ANSWERfinance (cash) raised by a company by issuing shares
dividend - ANSWERdistribution of a company's profits to shareholders and is
calculated as a number of cents per share
Australian securities exchange (ASX) - ANSWERprimary stock exchange group in
Australia
Primary markets - ANSWERdeal with the new issue of debt instruments by the
borrower of funds
Secondary markets - ANSWERdeal with the purchase and sale of existing securities
Global economic outlook - ANSWERprojected changes to the level of economic
growth throughout the world
Availability of funds - ANSWERease with which a business can access funds on the
international financial markets
Interest rates - ANSWERcost of borrowing money
Capital expenditure - ANSWERwhat is spent on business's non current or fixed assets
Qs & As|| 100% Correct| Grade A (Verified Answers)
Financial resources - ANSWERresources in a business that have a monetary or money
value
Financial management - ANSWERplanning and monitoring of a business's financial
resources to enable the business to achieve its financial goals
Assets - ANSWERproperty and other items such as machinery, vehicles and cash
(tangible assets) and patents, trademarks and goodwill (intangible assets)
Objectives of Financial management (5) - ANSWER1. Profitability
2. efficiency
3. growth
4. liquidity
5. solvency
Profitability - ANSWERability of a business to maximise its profits
Growth - ANSWERability of a business to increase its size in the longer term
Efficiency - ANSWERability of a business to use its resources effectively in ensuring
financial stability and profitability
Liquidity - ANSWERextent to which a business can meet its financial commitments in
the short term
Solvency - ANSWERextent to which the business can meet its financial commitments
in the longer term
Short term objectives - ANSWER1-2 years tactical plans
Long term objectives - ANSWERstrategic plans 5+ years
Internal finance - ANSWERfunds provided by the owners of the business or from the
outcomes of business activities (retained earnings)
Owners' equity - ANSWERfunds contributed by owners or partners to establish and
build the business
External finance - ANSWERfunds provided by sources outside of the business,
including banks, other financial institutions, government, suppliers or financial
intermediaries
, Bank overdraft (ST) ` - ANSWERbank allows a business or individual to overdraw their
account up to an agreed limit and for a specified time, to help overcome a temporary
cash shortfall
Commercial bills (ST) - ANSWERtype of bill of exchange (loan) issued by institutions
other than banks
Bill of exchange - ANSWERdocument ordering the payment of a certain amount of
money at some fixed future date
Factoring (ST) - ANSWERselling of accounts receivable for a discounted price to a
finance or factoring company
mortgage (LT) - ANSWERloan secured by the property of the borrower
Debentures (LT) - ANSWERissued by a company for a fixed rate of interest and for a
fixed period of time
Unsecured note (LT) - ANSWERloan for set period of time but is not backed by any
collateral or assets
Leasing (LT) - ANSWERpayment of money for the use of equipment that is owned by
another party
Equity - ANSWERfinance (cash) raised by a company by issuing shares
dividend - ANSWERdistribution of a company's profits to shareholders and is
calculated as a number of cents per share
Australian securities exchange (ASX) - ANSWERprimary stock exchange group in
Australia
Primary markets - ANSWERdeal with the new issue of debt instruments by the
borrower of funds
Secondary markets - ANSWERdeal with the purchase and sale of existing securities
Global economic outlook - ANSWERprojected changes to the level of economic
growth throughout the world
Availability of funds - ANSWERease with which a business can access funds on the
international financial markets
Interest rates - ANSWERcost of borrowing money
Capital expenditure - ANSWERwhat is spent on business's non current or fixed assets
