Understanding the implications of finance as a resource within a business
You will need to:
- analyse the costs of different sources of finance
You will need to research this for each of the identified sources, but as a guide, there will be financial costs on some sources - mainly interest added to the amount, and constraints on pay-back timescales (a "pressure" cost). On others there will be the "cost" of loss of control - as would be the case with some loans, grants, and share issues.
- explain the importance of financial planning
In essence, without financial planning there is no way of being certain that the organisation can fund its own activities. You will need to give more detail on how this is done.
- assess the information needs of different decision makers
In the context of Managing Finance, you need to identify the decision makers inside an organisation eg managers and specialists operating at different levels, and external decision makers such as shareholders, funding organisations, the government - and discuss the differences in the amount and quality of (financial/accounting) information they need.
- explain the impact of finance on the financial statements
Here you need to describe how the influx of funds - eg loans, grants, share issue income, retained profits - can influence the appearance of the profit and loss account and the balance sheet, and you should also briefly mention how organisations must be transparent about this.