[...]... final part of this chapter examines objectives in not-for-profit organisations 3 Study guide Intellectual level A Financial management function 1 The nature and purpose of financial management (a) Explain the nature and purpose of financial management 1 (b) Explain the relationship between financial management and financial and management accounting 1 2 Financial objectives and the relationship with corporate... company with shareholders 4 1: Financial management and financial objectives Part A Financial management function 1 The nature and purpose of financial management FAST FORWARD Financial management decisions cover investment decisions, financing decisions, dividend decisions and risk management 1.1 What is financial management? Financial management can be defined as the management of the finances of an organisation... price Part A Financial management function 1: Financial management and financial objectives 15 3.4 Shareholders, managers and the company's long-term creditors The relationship between long-term creditors of a company, the management and the shareholders of a company encompasses the following factors (a) Management may decide to raise finance for a company by taking out long-term or medium-term loans... Financial management function Financial accounts Management accounts Most financial accounting information is of a monetary nature Management accounts incorporate non-monetary measures Financial accounts present an essentially historic picture of past operations Management accounts are both a historical record and a future planning tool As we have seen financial management is the management of finance Finance... options and performance-related pay (ii) regulatory requirements such as corporate governance codes of best practice and stock exchange listing regulations 4 Financial and other objectives in not-for-profit organisations (a) Discuss the impact of not-for-profit status on financial and other objectives 2 (b) Discuss the nature and importance of Value for Money as an objective in not-for-profit organisations... decisions of financial management throughout this Study Text Examples of different types of investment decision Decisions internal to the business enterprise Whether to undertake new projects Whether to invest in new plant and machinery Research and development decisions Investment in a marketing or advertising campaign Part A Financial management function 1: Financial management and financial objectives... (d) 5 Encouraging the achievement of stakeholder objectives A3 (e) 6 Not-for-profit organisations A4 (a), (b), (c) Introduction In Parts A and B of this study text we examine the work of the financial management function and the framework within which it operates In this chapter, after introducing the nature and purpose of financial management, we consider the objectives of organisations We go on to examine... presented Financial accounts concentrate on the business as a whole, aggregating revenues and costs from different operations, and are an end in themselves 6 Management accounts Management accounts can focus on specific areas of an organisation's activities Information may aid a decision rather than be an end product of a decision 1: Financial management and financial objectives Part A Financial management. ..x Introduction P A R T A Financial management function 1 2 Financial management and financial objectives Topic list Syllabus reference 1 The nature and purpose of financial management A1(a), (b) 2 Financial objectives and the relationship with corporate strategy A2 (a), (b) 3 Stakeholders A3 (a), (b), (c) 4 Measuring... Other non -financial objectives are growth, diversification and leadership in research and development Non -financial objectives do not negate financial objectives, but they do suggest that the simple theory of company finance, that the objective of a firm is to maximise the wealth of ordinary shareholders, is too simplistic Financial objectives may have to be compromised in order to satisfy non-financial