Fichas
Week 1: Business/Corporate Finance
Fichas del conjunto (24)
- 1What are the three types of managerial decisions?1. Capital Budgeting
2. Capital Structure
3. Working Capital Management - 2The process of planning and managing a firm's long-term investment.Capital Budgeting
- 3The mixture of debt and equity maintained by a firm.Capital Structure
- 4A firm's short-term assets and liabilitiesWorking capital
- 5What are the three main forms of Businesses in Australia?1. Sole Proprietorship
2. Partnership
3. Corporation - 6A business owned by a single individual.Sole Proprietorship
- 7A business formed by two or more individuals or entities.Partnership
- 8A business created as a distinct legal entity owned by one or more individuals or entities.Corporation
- 9What are some advantages and disadvantages of Sole proprietorship?Advantages
• Easiest to start and least regulated
• Single owner keeps all the profits
• Taxed once as personal income
Disadvantages
• Limited to life of owner
• Equity capital limited to personal wealth
• Unlimited Liability
• Difficult to sell ownership interest - 10What are some advantages and disadvantages of a Partnership?Advantages
• Two or more owners
• More capital available
• Relatively easy to start
• Income taxed once as personal income
Disadvantages
• Unlimited liability
• General partnership
• Limited partnership
• Partnership dissolves when one partner dies or wishes to sell
• Difficult to transfer ownership - 11What are some advantages and disadvantages of a Partnership?Advantages
• Unlimited life
• Separation of ownership and management
• Transfer of ownership is easy
• Easier to raise capital
Disadvantages
• Separation of ownership and management
• Taxation of company profits can be an issue - 12What is the goal of Financial Management?Maximise the market value of the existing owners' equity.
- 13—Cash Flows to and from the Firm
- 14What is a Primary Market? Give an example.The corporation is the seller and the transaction raises money for the corporation. Securities are issued for the first time. For example, Bond Issuance and Private Placement.
- 15What is a Secondary Market? Give an example.The transaction is between sellers and securities are old. For example, dealer markets and auction markets (ASX).
- 16What is the problem that occurs when there is a possibility that there is a conflict of interest between the owners and management of a firm?Agency Problem
- 17What are the actions by managers that reduce the value of the existing owner's equity?Agency Costs
- 18How do we make sure managers act in the best interest of shareholders?◦ Build incentives into compensation
◦ Shareholders have control through election of directors - 19Enumerate the balance sheet equation.ASSETS = LIABILITIES+ OWNERS EQUITY
A = L + E - 20What is the difference between current assets and non-current assets?◦ Current Asset : short life asset, normally converted to cash within a year
WHILE
◦ Non-current asset: longer life (also called fixed assets) - 21How do you find the Net Working Capital?NET WORKING CAPITAL
=
CURRENT ASSETS - CURRENT LIABILITIES - 22What is Liquidity?It is the speed and ease of converting an asset to cash.
- 23How do you calculate Income?Income = Revenues - Expenses
- 24—
Información
- Descripción
- Using Financial Data, Valuation Method, Evaluating Projects and Cost of Capital
- Creado por
- Cyrill Bien Belardo
- Visitas
- 24
- Etiquetas
- Valoración