Financial objectives là gì
A financial objective is a specific goal or target of relating to the financial performance, resources and structure of a business Value of setting financial objectivesThe key benefits of setting financial objectives include:
Main types of financial objectiveThese can be summarised as follows: Revenue Objectives Most businesses set revenue objectives. Amongst the most common are revenue objectives relating to:
Cost objectives Cost minimisation is a common cost objective - particularly in relation to controlling the fixed costs of a business and, therefore, the break-even output. A business might also set objectives relating to unit costs and link these to targeted efficiency measures such as labour productivity and/or capacity utilisation. Profit objectives Most people assume that businesses aim to maximise their profits, so profit objectives are likely to be a key part of the overall corporate objectives for a business. Different types of profit objective include:
Cash flow objectives A timeless quote states that, in business: Revenue is vanity Profit is sanity , but Cash is KING Which neatly highlights the important of setting cash flow objectives. With adequate cash flow a business is more likely to be able achieve other financial objectives by providing extra financial resources. Typical cash flow objectives might include those relating to:
Capital structure objectives The capital structure of a business refers to the balance of its finance in terms of how much is equity (or share capital) and how much is is in the form of debt. The two key capital structure objectives tend to be:
Return on investment objectives Financial objectives relating to the return that businesses make on their investment tend to be of two types:
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