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ACCA Strategic Professional · Advanced Financial Management · Financial strategy formulation

Which feature most clearly distinguishes the financial objectives of a not-for-profit organisation from those of a listed company?

A not-for-profit organisation pursues multiple, often non-financial objectives, such as service delivery, while operating within financial constraints like breaking even or generating a surplus. It does not aim to maximise shareholder wealth, though it still manages cash, budgets and many stakeholders.

  1. AIt does not need to manage cash flow
  2. BIt pursues multiple, often non-financial, objectives and must satisfy financial constraints such as break-even or surplus rather than maximise shareholder wealthCorrect
  3. CIt cannot have any stakeholders other than its funders
  4. DIt is never subject to budgetary control

Explanation

Not-for-profit bodies typically pursue service or social objectives within financial constraints, with surplus used for the mission rather than distributed. They still manage cash and budgets and have many stakeholders, so the other options are wrong.

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