Topic 3: Finance

6 dot points across 6 inquiry questions, in syllabus order. Each dot point has a focused answer, with exam-style questions and worked answers where available.

How are ethical and legal expectations managed in financial management?

Ethical and legal aspects of financial management - audited accounts, record keeping, reporting standards, GST, taxation; the role of ASIC, APRA and the ATO; ethical responsibilities of financial managers

The HSC Business Studies ethical and legal side of financial management: audited accounts, record keeping, AASB and IFRS standards (including climate reporting from 2025), company tax, GST, superannuation and Payday Super, the roles of ASIC, APRA, the ATO and AUSTRAC, and ethical issues in financial reports, with verified cases (Westpac, PwC, Mercer).

15 min read →

What are the sources and influences on financial management for a business?

Sources of finance - internal (retained profits); external (debt - short-term: bank overdraft, commercial bills; long-term: mortgage, debentures, unsecured notes, leasing; equity - ordinary shares - new issues, rights issues, placements, private equity); financial institutions; influence of government and global market

The HSC Business Studies influences on financial management: retained profits; short and long-term debt; equity (new issues, rights issues, placements, share purchase plans, private equity); debt versus equity and matching finance to purpose; financial institutions; ASIC and company tax; and global influences, with verified examples including Qantas's 2020 raising.

15 min read →

What is the role of financial management in a business?

Strategic role of financial management; objectives of financial management - profitability, growth, efficiency, liquidity, solvency, short-term and long-term; interdependence with other key business functions

The HSC Business Studies role of financial management: the strategic role, the five objectives (profitability, growth, efficiency, liquidity, solvency) and how they are measured, conflicts between short-term and long-term objectives, and interdependence with operations, marketing and HR, using verified figures from Woolworths (F26), Qantas and Virgin Australia (COVID-19) and Atlassian.

14 min read →

How are financial reports analysed using ratios?

Monitoring and controlling - financial ratios - liquidity (current ratio); gearing (debt to equity); profitability (gross profit ratio, net profit ratio, return on equity); efficiency (expense ratio, accounts receivable turnover); limitations of financial reports

The HSC Business Studies processes of financial management: planning and implementing, the three financial statements, all seven syllabus ratios with their exact NESA formulas, a fully worked two-year data set, comparative ratio analysis, Woolworths F26 figures, and the six syllabus limitations of financial reports (normalised earnings to notes to the statements).

18 min read →

How is cash flow and working capital managed strategically?

Financial management strategies - cash flow management (cash flow statements, distribution of payments, discounts for early payment, factoring); working capital management (control of current assets - cash, receivables, inventories; control of current liabilities - payables, loans, overdrafts; strategies - leasing, sale and leaseback)

The HSC Business Studies cash flow and working capital strategies: the cash flow statement and a monthly cash budget, distribution of payments, discounts for early payment (with their true cost), factoring, control of cash, receivables, inventories, payables, loans and overdrafts, leasing and sale and leaseback, plus Payday Super from 1 July 2026.

16 min read →

How do businesses manage profitability and global financial exposures?

Financial management strategies - profitability management (cost controls - fixed and variable, cost centres, expense minimisation; revenue controls - marketing objectives); global financial management - exchange rates, interest rates, methods of international payment, hedging, derivatives

The HSC Business Studies profitability and global financial management strategies: fixed and variable cost controls, cost centres, expense minimisation, revenue controls, then exchange rates, interest rates, the four syllabus methods of international payment, hedging and derivatives, with verified 2025 to 2026 cases (Qantas fuel hedging, Cochlear currency effects, Woolworths costs).

16 min read →