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1ST YEAR PRELIM > BRIDGING > Flashcards

BRIDGING Flashcards

1
Q

Primary objective of financial management

A

Attempting to reduce cost of finance

Ensuring Sufficient availability of funds

Deals with planning, organizing, and controlling of financial activities like the procurement and utilization of funds.

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2
Q

The lifeline of any business

A

Finance

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3
Q

WHO:Financial Management is the activity concerned with planning, raising, controlling and administering of funds used in the business

A

Guthman and Dougal

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4
Q

WHO:Financial Management is the area or business management devoted to judicious use of capital and careful selection of sources and capital in order to enable a spending unit to move in the direction of reaching the goals.

A

J.F. Brandley

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5
Q

WHO:Financial management is the operational activity of a business that is responsible for obtaining and effectively utilizing the funds necessary for efficient operation

A

Massie

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6
Q

An organic function of any business

A

Financial Management

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7
Q

THEORIES around financial management

A
  1. Experts believe that FM is all about providing funds needed by a business on terms that are most favorable, keeping objectives in mind.
  2. Finance is all about cash
  3. Widely accepted: FM includes the procurement of funds and their effective utilization.
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8
Q

It is important that financial decisions take care of the ______ interest.

A

Stakeholders’

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9
Q

SCOPES OF FINANCIAL MANAGEMENT

A

Financing Decision
Investment Decision
Dividend Decision

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10
Q

SCOPES OF FINANCIAL MANAGEMENT: Manager decide on the amount of investment available out of the existing finance on a long-term and short term basis

A

Investment Decision

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11
Q

Other word for long term investment decision

A

Capital Budgeting

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12
Q

It means committing funds for a long period of time like fixed assets

A

Long-term Investment or Capital Budgeting

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13
Q

Other term for short term investment

A

Working Capital

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14
Q

Committing funds for a short period of time like current assets

A

Short-term investment or Working Capital

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15
Q

TWO types of investment

A

Long-term Investment or Capital Budgeting

Short-term investment or Working Capital

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16
Q

SCOPES OF FINANCIAL MANAGEMENT: Managers also make decision pertaining to raising finance from long-term sources and short- term sources.

A

Financing Decision

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17
Q

TWO sources of Financing Decision

A

Capital Structure (long-term)

Working Capital (short-term)

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18
Q

TWO types of Financing Decision

A

Financial Planning Decisions

Capital Structure Decisions

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19
Q

FINANCING DECISIONS: Relates to estimating the sources and applicaiton of funds

A

Financial Planning Decisions

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20
Q

FINANCING DECISIONS: Identify sources of funds

A

Capital Structure Decisions

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21
Q

Involve decisions with respect to choosing external sources

A

Capital Structure Decisions

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22
Q

SCOPES OF FINANCIAL MANAGEMENT: Involve decisions related to the portion of profits that will be distributed as dividend

A

Dividend Decisions

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23
Q

FINANCIAL SERVICE: the process of developing a personal roadmap for your financial well being.

A

Personal Financial Planning

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24
Q

FINANCIAL SERVICE: An ongoing process that looks at our entire financial picture in order to create strategies for achieving your short-term and long-term goals.

A

Investment

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25
Q

FINANCIAL SERVICE: A branch of finance that focuses on how people purchase real estate, whether that be home, an office or a plot of land

A

Real Estate

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26
Q

FINANCIAL SERVICE: refers to a comprehensive plan of your long term and short term objectives for financial security

A

Personal Financial Planning

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27
Q

5 FINANCIAL SERVICE

A
  • Banking
  • Personal Financial Planning
  • Investment
  • Real Estate
  • Insurance
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28
Q

3 MANAGERIAL FINANCE

A

Financial Analyst
Capital Budgeting Analyst
Cash Manager

29
Q

MANAGERIAL FINANCE: Guide businesses and individuals in decisions about expending money to attain profit

A

Financial Analyst

30
Q

MANAGERIAL FINANCE: Summarize budgets and offer insights regarding the finds request

A

Capital Budgeting Analyst

31
Q

MANAGERIAL FINANCE: A professional who handles the financial transactions of an organization or client

A

Cash Manager

32
Q

A business owned by one person and operated for one’s own profit

A

Sole Proprietorship

33
Q

The owner is legally responsible for the debts and taxes of the business and very involved in its day to day activities.

A

Sole Proprietorship

34
Q

The most common form of business organization

A

Sole Proprietorship

35
Q

A business owned by two or more people and operated for profit

A

Partnership

36
Q

Partnership is based on an agreement called _______

A

Article of Co-Partnership

37
Q

Partnership is dissolved when______

A

A partner withdraws or dies

38
Q

An entity created by law

A

Corporation

39
Q

They have legal powers of an individual in that it can sue and be sued, make and be party to contracts, and acquire property in its own name

A

Corportation

40
Q

Advantages of Corporation

A

Limited Liability of stakeholders and perpetual life

41
Q

Only form of business that is a separate legal entity

A

Corporation

42
Q

A study of choice

43
Q

The study of financial allocation that can provide insights on where to pit ones money and why it is necessary.

44
Q

They recognize revenues at the point of sale and consider expenses when incurred, regardless of the direction of cash flow in the firm.

A

Accountants

45
Q

Decision Rule for managers

A

Only take actions that are expected to increase the share price.

46
Q

The reasons why it might not lead to the highest possible share price

A
  • Timing is important
  • Profits do not necessarily result in cash flows available to stockholders
  • Profit maximization fails to account for risk
47
Q

The two(2) key activities related to a firm’s balance sheet

A

Financing Decisions
Investment Decisions

48
Q

KEY ACTIVITIES RELATED TO A FIRM’S BALANCE SHEET: Deals with the items that appear on the asset section of the balance sheet

A

Investment Decisions

49
Q

KEY ACTIVITIES RELATED TO A FIRM’S BALANCE SHEET: Generally refers to the items that appear on the liability and equity section of the balance sheet

A

Financing Decisions

50
Q

FINANCIAL OR MANAGERIAL: Concerned with the design and delivery of advice and financial products to individuals,
businesses and governments.

A

FINANCIAL SERVICE

51
Q

FINANCIAL OR MANAGERIAL: Concerned with the duties of a Financial Manager working in a business. This encompasses financial planning or budgeting, credit extensions to customers or other credit admin function, investment evaluation and analysis, and obtaining of funds acquisition for a firm.

A

MANAGERIAL FINANCE

52
Q

PROFESSIONAL CERTIFICATIONS IN FINANCE: A graduate-level course of study offered by CFA Institute which is focused largely on the investment side of finance.

A

CHARTERED FINANCIAL ANALYST(CFA)

53
Q

PROFESSIONAL CERTIFICATIONS IN FINANCE: This program requires students to pass a single exam that assesses knowledge and skills needed in working for a corporate treasury department.

A

CERTIFIED TREASURY PROFESSIONAL(CTP)

54
Q

PROFESSIONAL CERTIFICATIONS IN FINANCE: To obtain CFP status, students should pass a 10-hour exam covering a wide range of topics related to personal financial planning.

A

CERTIFIED FINANCIAL PLANNER(CFP)

55
Q

PROFESSIONAL CERTIFICATIONS IN FINANCE: This administers certification programs for financial professionals in a wide range of fields. The certifications they issue include the Charter Portfolio Manager, Chartered Asset Manager, Certified Risk Analyst, Certifies Cost Accountant and Certified Credit Analyst.

A

AMERICAN ACADEMY OF FINANCIAL MANAGEMENT(AAFM)

56
Q

PROFESSIONAL CERTIFICATIONS IN ACCOUNTING

A
  • CERTIFIED PUBLIC ACCOUNTANT(CPA)
  • CERTIFIED MANAGEMENT ACCOUNTANT(CMA), - - CERTIFIED INTERNAL AUDITOR(CIA)
57
Q

FINANCE OR ACCOUNTING: ACCRUAL METHOD

A

ACCOUNTING

58
Q

FINANCE OR ACCOUNTING: RECOGNIZE REVENUES AT THE POINT OF SALE AND CONSIDER EXPENSES WHEN INCURRED, REGARDLESS OF THE DIRECTION OF CASH FLOW IN THE FIRM

A

ACCOUNTING

59
Q

FINANCE OR ACCOUNTING: CASH FLOW

60
Q

FINANCE OR ACCOUNTING: ACTUAL INFLOWS AND OUTFLOWS OF CASH, RECOGNIZING REVENUES WHEN CASH IS COLLECTED AND CONSIDERING EXPENSES WHEN ACTUALLY PAID

61
Q

A system rules, practices and processes by which a company is directed and controlled.

A

Corporate Governance

62
Q

It refers to the way in which companies are governed and to what purpose.

A

Corporate Governance

63
Q

It identifies who has power and accountability, and who makes decisions.

A

Corporate Governance

64
Q

MAJOR PARTICIPANTS IN AN
ORGANIZATION

A
  • Shareholders
  • Board of Directors
  • Managers
  • Officers of Corporation
65
Q

Refers to implementing appropriate business policies and practices with regard to arguably controversial subjects.

A

Business ethics

66
Q

The standards of conduct or moral judgement that
apply to persons engaged in industry or commerce. Violations of these standards in finance include, but not limited to misstated financial statements, misleading financial forecast or projections, fraud, bribery, kickbacks, insider trading, excessive executive compensations, and options backdating.

A

Business ethics

67
Q

When managers deviate from the goal of maximization of shareholder wealth by putting their personal goals above the goals of shareholders, this results to __________

A

agency problem and issues

68
Q

AGENCY PROBLEM AND ASSOCIATED AGENCY COST CAN BE REDUCED THROUGH THE FOLLOWING:

A
  1. Properly Constructed and Implemented Corporate Governance Structure
  2. Structure expenditures thru compensation plans
  3. Market Forces Such As Shareholder Crusading From Large Institutional Investors
  4. Threat of Hostile Takeovers

1ST YEAR PRELIM (10 decks)

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