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SingaporeBusiness Management

Financial Management and Information

6 dot points across 6 inquiry questions. Click any dot point for a focused answer with worked past exam questions where available.

How does a business plan and control its finances, and what does it learn when reality differs from the plan?

Explain the purposes of budgeting and variance analysis, and evaluate their use in planning, control and motivation
A focused answer to the H2 Management of Business outcome on budgeting. The purposes of budgets, how variances are calculated and interpreted (favourable versus adverse), the link to control and motivation, and how to evaluate budgeting - with worked variance calculations.
8 min answer →

At what level of output does a business start to make a profit, and how safe is its current position?

Explain costs, contribution and break-even analysis, and evaluate their use in business decision making, including the margin of safety
A focused answer to the H2 Management of Business outcome on costs and break-even. Fixed, variable and total costs, contribution, the break-even formula, margin of safety, and how to use and critique break-even analysis - with fully worked KaTeX calculations.
9 min answer →

What do a firm's main financial statements show, and why is a profitable firm not necessarily a safe one?

Explain the purpose and content of the income statement and the statement of financial position, and evaluate the difference between profit and cash flow
A focused answer to the H2 Management of Business outcome on financial statements. The income statement and statement of financial position (balance sheet), working capital, and the crucial difference between profit and cash flow - with a worked example of why a profitable firm can run out of cash.
9 min answer →

How does a business decide whether a large investment is worth making, and which method should it trust?

Explain the main methods of investment appraisal, including payback, average rate of return and net present value, and evaluate their use in investment decisions
A focused answer to the H2 Management of Business outcome on investment appraisal. Payback period, average rate of return (ARR) and net present value (NPV), the time value of money, and how to evaluate and choose between the methods - with fully worked KaTeX calculations.
9 min answer →

How do we turn raw financial figures into a judgement about how well a business is performing?

Explain and calculate the main accounting ratios for profitability, liquidity and gearing, and evaluate their use and limitations in assessing performance
A focused answer to the H2 Management of Business outcome on ratio analysis. Profitability ratios (gross and net margin, ROCE), liquidity ratios (current and acid-test), gearing, how to interpret ratios through comparison, and the limitations of ratio analysis - with worked KaTeX calculations.
9 min answer →

Where does a business get its money from, and how does it choose the right source?

Explain the main internal and external sources of finance, both short and long term, and evaluate the choice of finance for a given purpose
A focused answer to the H2 Management of Business outcome on sources of finance. Internal versus external, short versus long term, debt versus equity, and how to evaluate the right source by matching it to purpose, cost, risk and control.
8 min answer →