Busfin Flashcards
A body of business concerned with the efficient and effective use of either equity capital, borrowed cash or any other business funds as well as taking the right decision for profit maximization and value addition of an entity.
Financial Management
It ensures that financial information is prepared in accordance with accounting principles and International Financial Reporting Standards.
Disseminating
process seeks to match the organization’s operational and investment activities to its overall cash flow capabilities.
Planning
Financial management prescribes the appropriate contingency measures for both operational and strategic risks.
Managing Risks
Helps business owners and employees to prevent or reduce the risks from theft, fraud and embezzlement.
Insurance and automated financial management systems
The financial management function exerts internal controls over financial resources with the objective of ensuring efficient resource utilization.
Exerting Controls
Begin with goal setting, saving money, and patiently working toward growing an investment. The
steps should be realistic but also give a person or a business something to strive for in the future.
Sound Financial Principles
Gives an incentive for adhering to principles of financial management.
Setting a goal
It allows a company to provide a monetary value for items that make up their inventory.
Inventories are usually the largest current asset of a business, and proper measurement of them is necessary to assure accurate financial statements.
Inventory Valuation
It is a comprehensive evaluation of someone’s current and future financial state by using
currently known variables to predict future cash flows, asset values and withdrawal plans.
Financial Plan
provide consumers and commercial clients with a wide range of services and different types of banking products.
Financial institutions
offer various types of insurance, ranging from life insurance to insurance on mortgage contracts.
Financial institutions
Are legal agreements that require one party to pay money or something else of value or to promise to pay under stipulated conditions to a counterpart in exchange for the payment of interest, for the acquisition of rights, for premiums, or for indemnification against risk.
Financial Instrument
Is the all-encompassing term that covers the buying and selling of monetary goods.
Financial Market
consists of the primary and secondary markets, which define the origin of the monetary good, and a wide selection of markets that define the type of monetary good.
Financial Market
Is a type of security that represents the ownership in a company.
Equity
Allows a group of people to pool their money together and have it professionally managed, in keeping with a predetermined investment objective. This investment avenue is popular because of its cost-efficiency, risk-diversification, professional management and sound regulation.
Mutual Funds
are fixed income instruments which are issued for the purpose of raising capital.
Bonds
Investing in bank or post-office deposits is a very common way of securing surplus funds.
These instruments are at the low end of the risk-return spectrum.
Deposits
These are relatively safe and highly liquid investment options. Treasury bills and money market funds are cash equivalents.
Cash Equivalent
is one of the most important roles of financial institutions.
Provision of credit
Refers to the movement of money in and out of a mutual fund.
Flow of Funds
control an organization’s assets, including its investments and cash, to maximize their efficient use.
Financial managers
Records that provide an indication of the organization’s financial status.
Financial statements
is formal records of the financial activities of a business, person, or other entity.
Financial report
Reports on a company’s assets, liabilities, and Ownership equity as of a given point in time.
Balance sheet / Statement of Financial Position or Condition
Reports on a company’s income, expenses, and profits over a period of time.
Income statement / Profit and Loss statement (or “P&L”),
provide information on the operation of the enterprise. These include sale and the various expenses incurred during the processing state.
Profit & Loss account
It reports on a company’s cash flow activities; particularly it is operating, investing and financing activities.
Cash flow statements
It explains the changes in a company’s retained earnings over the reporting period.
Statements of retained earnings
Refers to the ability to convert the asset into cash – some items may be more liquid than others.
Liquidity
A term that is used to refer to the current level of financial stability associated with a company or individual. The term can also apply to the status of a particular area of finances, such as insurance, cash flow, or property.
Solvency
Means that the business has cash in hand to honor current obligations, or at least has assets that can quickly be converted to cash without impacting the ability of the business to continue functioning.
Liquidity solvency
Refers to the potential of a venture to be financially successful.
Profitability
Enables investors and corporate management to take a deep look at a company’s finances, with a special emphasis on how financial statement items vary over a period of time.
Vertical analysis
A business can quickly identify strengths, weaknesses, and trends
Vertical analysis
Refers to a type of fundamental analysis in which a financial analyst uses certain financial data to assess a company’s performance over time.
Horizontal analysis
Simple but effective tool that is often used to get an accurate picture of the financial stability of a company.
Current Ratio
Is a profitability ratio that shows the relationship between gross profit and total net sales revenue.
Gross Profit Ratio
It is used to examine the ability of a business to create sellable products in a cost-effective
manner.
Gross Profit Ratio
Is a standard financial calculation that determines the number of times a business replaces its inventory to generate its current level of sales over a given time period, typically 12 months.
Inventory Turnover Ratio
A process of setting objectives, assessing assets and resources, estimating future financial needs, and making plans to achieve monetary goals.
Financial Planning
