Untitled

Page 1

Financial Management

Chapter 1

Economics, ACCT?

Assets value and the information on the cash flows.

What is Financial Management?

What is Finances?

Corporate Finances, Capital Market and Investments

What is the focus of financial management?

ASSETS, how much and what to acquire, also how to maximize the value of the firm.

What does capital markets relate to?

Determine the stock prices, interest and how much money the company need. Mutual stockbrokers etc.

Investments?

Decisions related to stocks and bonds.

PORTFOLIOS??

SECURITY ANALYSIS?

PORTFOLIO THEORY DEALS?

Finance within the organization

Forms of Business Organizations

Proprietorship-Gov regulations, lower taxes: less liability,has a limited time

Partnership

Corporation-unlimited life,easy to transfer shares-High taxes

Limited Liability Company (LLC) = partnership + corporation

Limited Liability Partnership (LLP)

BOTH have limited liability but are charged taxes like partnerships

MANAGERS GOAL?

Maximize the value of common stock at the long run

STOCK PRICES?

Based on cash flow expected in the future

Stock based compensations for managers

New Page