Managing Financial Resources and Decisions

UNIT 2: MANAGING FINANCIAL RESOURCES AND DECISIONS

Unit 2:
Unit code: QCF level: Credit value:
Aim

Managing Financial Resources and Decisions
H/601/0548 4 15 credits

The unit aim is to provide learners with an understanding of where and how to access sources of finance for a business, and the skills to use financial information for decision making.

Unit abstract
This unit is designed to give learners a broad understanding of the sources and availability of finance for a business organisation. Learners will learn how to evaluate these different sources and compare how they are used. They will learn how financial information is recorded and how to use this information to make decisions for example in planning and budgeting. Decisions relating to pricing and investment appraisal are also considered within the unit. Finally, learners will learn and apply techniques used to evaluate financial performance.

Learning outcomes
On successful completion of this unit a learner will: 1 2 3 4 Understand the sources of finance available to a business Understand the implications of finance as a resource within a business Be able to make financial decisions based on financial information Be able to evaluate the financial performance of a business.

BH023329 – Edexcel BTEC Levels 4 and 5 Higher Nationals specification in Business – Issue 1 – April 2010 © Edexcel Limited 2010

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UNIT 2: MANAGING FINANCIAL RESOURCES AND DECISIONS

Unit content

1

Understand the sources of finance available to a business Range of sources: sources for different businesses; long term such as share capital; retained earnings; loans; third-party investment; short/medium term such as hire purchase and leasing; working capital stock control; cash management; debtor factoring Implications of choices: legal, financial and dilution of control implications; bankruptcy Choosing a source: advantages and disadvantages of different sources; suitability for purpose eg matching of term of finance to term of

Links: This unit links with the following units within this specification Unit 6: Business Decision Making, Unit 9: Management Accounting: Costing and Budgeting, Unit 10: Financial Accounting and Reporting, Unit 11: Financial Systems and Auditing and Unit 12: Taxation. This unit also covers some of the underpinning knowledge and understanding for the NVQ in Accounting as set out in Annexe B. The unit covers financial topics essential for learners who would like a career in this field and wish to gain membership of a professional accounting body. Essential requirements Learners will require access to financial and company reports. Employer engagement and vocational contexts Centres should develop links with local businesses. Many businesses and chambers of commerce want to promote local business and are often willing to provide work placements, visit opportunities, information about businesses and the local business context and guest speakers. www.businessbritainuk.co.uk www.fsb.org.uk provides information about business in Britain and has extensive links to other business and business news sites. The Federation of Small Businesses provides information, support and guidance about small businesses in the UK. BH023329 – Edexcel BTEC Levels 4 and 5 Higher Nationals specification in Business – Issue 1 – April 2010 © Edexcel Limited 2010 11