Unit 3 Personal and Business Finance

Unit introduction

This unit includes aspects of both personal and business finance. Personal finance involves the

understanding of why money is important and how managing your money can help prevent

future financial difficulties. It is vital you understand the financial decisions you will need to take

throughout your life and how risk can affect you and your choices. This unit will also give you

an insight into where you can get financial advice and support.

The business finance aspects of the unit introduce you to accounting terminology, the purpose

and importance of business accounts and the different sources of finance available to businesses.

Planning tools, such as cash flow forecasts and break-even, will be prepared and analysed.

Measuring the financial performance of a business will require you to prepare and analyse

statements of comprehensive income and statements of financial position.

This unit will provide a foundation for a number of other finance and business units and will help

you to analyse profitability, liquidity and business efficiency. It will give you the knowledge and

understanding to manage your personal finances and will give you a background to business

finance and accounting as you progress to employment or further training.