1. Functional objectives and
strategies

2. Recap
• What is a corporate objective?
• What are business functions?
• Can you give and example of a functional
objective?
• How are functional objectives and corporate
objectives related?
• What is the relationship between functional
objectives and the functional strategies?

3. Financial objectives and accounts
What we will examine;
• The types of financial objectives businesses
pursue
• The external and internal influences on
financial objectives

4. Key terms
Profit- the surplus of revenues over total costs
at the end of a trading period
Cash flow- the movement of money in and out
of a business over a period of time
Return on Capital Employed- the net profits of a
business expresses as a percentage of the value
of capital employed

5. Financial objectives
• A goal or target pursued by the finance
department within an organisation
• Likely that it will contain a specific numerical
element and also a timescale within which it is
to be achieved
• It will be set by the managers responsible for
the finance of the business

6. Thought shower activity
Financial
objectives

7. Financial objectives
• Return on capital employed (ROCE) targets
• Shareholders’ returns
• Cost minimisation
• Cash flow targets

8. Internal influences on FO
• Corporate objectives
• Nature of the product that is sold
• Objectives of the senior managers

9. External influences on FO
• Actions of other businesses
• Availability of external finance
• State of the market

10. Analysis and evaluation question
Pg. 11 of your textbook
Please answer ‘analysis and evaluation
questions’
Q1. A
Q2. B