STFM Exam study Questions with Correct Answers

STFM Exam study Questions with Correct
Answers
financial management

is the process of planning, organizing, directing, and controlling the financial activities of an

organization

financial management

Its most basic goal is to ensure that the business doesn't go bankrupt. Financial management

addresses the most critical issues that a business can face, such as loss of revenue

key elements of financial management

Maximizing profits

Tracking liquidity and cash flow

Ensuring compliance

Developing financial scenarios

Manage relationships

maximizing profits

This refers to making decisions and using resources in ways that increase a company's net

income (income after all costs and expenses).

tracking liquidity and cash low

This involves monitoring how much cash is available at any given time and ensuring the

business can pay its short-term debts and obligations, like rent, salaries, or suppliers.

, ensuring compliance

Financial managers must ensure the business follows local laws, tax rules, and accounting

standards.

developing financial scenarios

This refers to planning ahead by analyzing various possible financial situations the business

might face—both positive and negative

manage relationship

Finance managers must build and maintain good relationships with stakeholders who affect or

support the financial health of the company.

scope of financial management

Planning

Budgeting

Managing and Assessing Risk

Procedure

planning

involves setting financial goals and outlining strategies to achieve them.

budgeting

is the process of allocating funds to different areas of the business, such as operations, marketing,

payroll, or inventory, based on the financial plan.

managing and assessing risk