Nonfinancial objectives
The following nonfinancial objective can help Demo Gold to achieve a sustainable increase in shareholder value:

• Customer satisfaction
  The company should seek to provide minerals of the quality that customers expect for a fair price.
• Employee satisfaction
  The company should seek to maintain a safe working environment and provide job security to employees. Again, the company should seek to provide opportunities to employees to develop their professional knowledge and skills, grow in the company.
• Supplier satisfaction
  The company should seek to remain loyal to its suppliers and continue to give them business. It should seek to pay it’s a reasonable price and them promptly.
• Market leadership in research and development
  The company to show a dominant position and leadership in research and development
• Diversification strategy
  Seeking to expand and diversify business and product offerings to the market
• Market Share growth
  The company should seek to expand to increase its market share
• Reduction in negative environmental footprint
  The company should seek to reduce environmental degradation and pollution. It should seek to protect marine life in the area it seeks to operate.

[Marks allocation: 4 nonfinancial objectives @ 1 mark each = 4 marks]

Investing decisions
Investing decisions are decisions that relate to the acquisition and disposition of assets that would generate cash flows for the firm. The objective of investing decisions is to achieve optimal allocation of limited resources to investment opportunities.
Directors are expected to make investing decisions such as the following:

• Deciding on growth strategy; whether to employ an internal growth strategy, which involves pursuing internally developed projects, or external growth strategies, which involves acquisitions and mergers.
• Deciding on the proportion of the components of assets needed to achieve the objectives of the firm. For instance, the proportion of property, plant and equipment in the total portfolio of assets.
• Deciding on the replacement of assets.
• Deciding on disinvestments.
• Deciding on how much to allocate to competing investment opportunities.

[Marks allocation: objective = 1; 2 decisions @ 1 mark each = 2 marks]
(3 marks)

Financing
Financing decisions are related to the mix of the various types if finance the firm should use. The objective of financing decisions is to minimise the risk and cost of finance.
The directors are expected to financing decisions such as the following:

• Deciding on the blend of equity and debt in the financing structure.
• Deciding on the proportion of prior-charge capital in total capital.
• Deciding on the method of issuing new securities.
• Deciding on whether to obtain a stock market listing.
• Deciding on whether to issue securities in international markets.

[Marks allocation: objective = 1; 2 decisions @ 1 mark each = 2 marks]
(3 marks)

Dividend
Dividend decisions are related to payment of dividend and retention of earnings for reinvestment. The objective of dividend decisions is to achieve a balance between meeting shareholders expectation of current dividend and reinvesting enough earnings to achieve targeted growth.
The directors are expected to make dividend decisions such as the following:

• Deciding on whether to recommend payment of dividend or reinvestment of earnings.
• Deciding on the amount of dividend to recommend.
• Deciding on the method of paying a dividend. Whether to pay cash dividends or use alternatives such as stock dividends and share repurchase.
• Deciding on whether to capitalize previously retained earnings through a bonus share issue.

[Marks allocation: objective = 1; 2 decisions @ 1 mark each = 2 marks]
(3 marks)

Relevant factors in the external environment
Directors should consider the following factors in the external business environment when making financial decisions:

• Laws and regulations
• Economic factors
• Ecological issues
• Ethical issues

[Marks allocation: 2 factors @ 0.5 marks each = 1 mark]

• The welfare of employees
  An organisation might try to provide good wages and salaries, comfortable and safe working conditions, good training and career development, and good pensions. If redundancies are necessary, many not for profit organisations will provide generous redundancy payments, or spend money trying to find alternative employment for redundant staff.
• Survival
  One of the first economic objectives of a non-for-profit is to raise enough money to meet its operating expenses in order to survive. These might include staffing needs, rent, utilities, insurance, furniture, computers and the other normal expenses of running a business. Some non-for-profits are staffed with employees, while others use an association management company or a contract executive director and vendors.
• Fundraising
  A key economic goal of charities is to raise funds to meet their charitable purposes. The process of fundraising goes beyond holding events or sending out mailings. A complete development effort includes creating a database of regular donors, applying for grants, seeking individual and corporate donations and holding events such as balls, auctions, raffles and sporting events. The cost of fundraising efforts can outweigh the total money spent on an organization’s charitable purpose at new or smaller organizations.
• Compliance
  The GRA sets target qualified distribution, or charitable spending, levels for some tax-exempt organizations, and these organizations set objectives to meet their requirements. For example, if an endowment earns GH¢100,000 annually for a nonprofit and the nonprofit only donates GH¢10,000 of that money, the GRA might fine the organization or ultimately revoke its tax-exempt status.
• Related and Unrelated Business Income
  Some not-for-profit, especially trade associations that are not not-for-profit, seek to raise money by charging for dues, selling newsletter advertising, sponsorships, educational materials, logoed items, holding events, seminars or a conference or holding a trade show. If the sales don’t relate directly to the organization’s purpose, this is known as unrelated business income and is taxable. Unrelated business income is often a major financial objective of organizations with low dues and contributions. Dues are considered related business income. Advertising revenue that covers the cost of an educational publication is related business income, while profits from ads might be considered unrelated and taxable income.
• Endowment: Not all of the money a charity raises goes toward administration or service. Many not-for-profit have an economic objective of creating an endowment, which is a financial account that generates enough interest each year to fund charitable activities. Some not-for-profit set an objective of a dollar amount for their endowment, such as creating a GH¢1 million endowment. Once the fund is fully endowed, the organization sets an annual spending objective for the interest earned.
• Welfare of the society

Social objective are those objectives of business, which are desired to be achieved for the benefit of the society. Since business operates in a society by utilizing its scarce resources, the society expects something in return for its welfare. No activity of the business should be aimed at giving any kind of trouble to the society.

If business activities lead to socially harmful effects, there is bound to be public reaction against the business sooner or later. Social objectives of business include production and supply of quality goods and services, adoption of fair trade practices and contribution to the general welfare of society and provision of welfare amenities.

• Raising of Funds
  In order to meet the obligation of the business it is important to have enough cash and liquidity. A firm can raise funds by the way of equity and debt. It is the responsibility of a financial manager to decide the ratio between debt and equity. It is important to maintain a good balance between equity and debt.
• Allocation of Funds
  Once the funds are raised through different channels the next important function is to allocate the funds. The funds should be allocated in such a manner that they are optimally used. In order to allocate funds in the best possible manner the following point must be considered
  * The size of the firm and its growth capability.
  * Status of assets whether they are long-term or short-term.
  * Mode by which the funds are raised.
  These financial decisions directly and indirectly influence other managerial activities. Hence formation of a good asset mix and proper allocation of funds is one of the most important activity.
• Profit Planning
  Profit earning is one of the prime functions of any business organization. Profit earning is important for survival and sustenance of any organization. Profit planning refers to proper usage of the profit generated by the firm.
  Profit arises due to many factors such as pricing, industry competition, state of the economy, mechanism of demand and supply, cost and output. A healthy mix of variable and fixed factors of production can lead to an increase in the profitability of the firm.
  Fixed costs are incurred by the use of fixed factors of production such as land and machinery. In order to maintain a tandem it is important to continuously value the depreciation cost of fixed cost of production. An opportunity cost must be calculated in order to replace those factors of production which has gone through wear and tear. If this is not noted then these fixed cost can cause huge fluctuations in profit.
• Understanding Capital Markets
  Shares of a company are traded on stock exchange and there is a continuous sale and purchase of securities. Hence a clear understanding of capital market is an important function of a financial manager. When securities are traded on stock market there involves a huge amount of risk involved. Therefore a financial manger understands and calculates the risk involved in this trading of shares and debentures.
  It’s on the discretion of a financial manager as to how to distribute the profits. Many investors do not like the firm to distribute the profits amongst shareholders as dividend instead invest in the business itself to enhance growth. The practices of a financial manager directly impact the operation in capital market.
• Cash management (Working Capital Management)
  Cash Management is an important aspect of your business because it provides you with a process of monitoring, analyzing and adjusting the cash flow of your business which will enhance liquidity and profits while also reducing risk.
• Risk Management
  The role of a Finance Manager is to communicate risk policies and processes for an organisation. They provide hands-on development of risk models involving market, credit and operational risk, assure controls are operating effectively, and provide research and analytical support.

• It serves the interests of owners, (shareholders) as well as other stakeholders in the firm; i.e. suppliers of loaned capital, employees, creditors and society.
• It is consistent with the objective of owners’ economic welfare.
• The objective of wealth maximization implies long-run survival and growth of the firm.
• It takes into consideration the risk factor and the time value of money as the current present value of any particular course of action is measured.
• The effect of dividend policy on market price of shares is also considered as the decisions are taken to increase the market value of the shares.
• The goal of wealth maximization leads towards maximizing stockholder’s utility or value maximization of equity shareholders through increase in stock price per share.

• Staff motivation
• Top service to customers
• Growth
• Market leadership in research and development
• Social responsibility
• Environmental sustainability
• Diversification purposes etc.                                                                    (Any 3 points)

• Profitability – the operations of the company should be profitable to enable it pay adequate returns to its investors and retain some for reinvestment;
• Market share – the company should grow and maintain its market share to enable it continue to have demand for its products and thereby generate adequate revenue from its sales;
• Growth – growth is one of the key expectations of every organisation, expanding in its operations scope of coverage and investment size;
• Cash flow – have adequate cash flow to meet its operational cost, service loans and other debts as and when they fall due;
• Customer satisfaction – have to be competitive by meeting the expectations of customers, their changing needs and preferences. This also enhances the company’s competitive advantage;
• Quality of products – the quality of products at the most competitive price also enables the company to attract and retain customers to enable it expand its customer base, grow to enjoy economies of scale which will lead to lower cost and increased profit;
• Industrial relations – industrial relationship is key to enhancing the organisations bargaining power, and obtain information about developments in the industry to enable it respond appropriately;
• Added value – this enable the company to position itself in society as a good cooperate citizen, providing services to society to enhance its public image;
• Highly skilled personnel – highly skilled improve efficiency, quality and creativity to pursue to mission of the organisation in the most cost effective manner.