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REVIEWER > BUSINESS FINANCE > Flashcards

BUSINESS FINANCE Flashcards

1
Q

deals with decisions that are supposed to maximize shareholders wealth

A

financial management

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2
Q

play a crucial role in making financial decisions and exercising control over finances in the organizations

A

financial decisions and controls

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3
Q

are responsible for the planning of financial activities and resources in the organization

A

financial planning

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4
Q

responsibility of financial management to estimate the capital requirements of the organization from time to time

A

Capital management

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5
Q

ensures that all financial resources of the organization are used and invested effectively and efficiently

A

allocating and utilization of financial resources

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6
Q

important for organizations to have sufficient working capital and cash flow to meet their operational expenses and emergencies

A

cash flow management

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7
Q

the decision on how to surplus or profits the organizations is utilized is taken by the financial managers. they decided if dividends should be distributed

A

disposal of surplus

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8
Q

maintain all necessary reports related to the finance of the organization

A

financial reporting

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9
Q

prepares the organization to forecast risk, put in place mitigation plans as well as to meet unforeseen risk and emergencies effectively

A

risk management

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10
Q

goal of financial management

A

to minimize the value of shares of stocks

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11
Q

the owners or investors in the firm

A

shareholders

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12
Q

appointing and removing members of the top management including president

A

board of directors

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13
Q

it is the highest policy making body in a corporation

A

board of directors

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14
Q

overseeing the operations of a company and ensuring that the strategies as approved by the board are implemented as planned

A

president

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15
Q

representing the company in professional social, and civic activities

A

president

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16
Q

formulating marketing strategies and plans

A

vp for marketing

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17
Q

ensuring production meets customers demands

A

vp for production

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18
Q

identifying adequete and cheap raw material

A

vp for production

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19
Q

assisting other departments in hiring employees

A

vp for administration

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20
Q

identifying means, process, or systems that will minimize the operating cost of the company

A

vp for administration

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21
Q

funding long-term investment and working capital which deals with the day to day operations of the company

A

vp for finance

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22
Q

developing policies on dividends

A

vp for finance

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23
Q

dealing with daily operations of the company

A

vp for finance

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24
Q

serves as the link between depositor who has the money and the lender who needs money

A

financial intermediary

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25
include commercial banks, universal banks, investment banks, investment companies, mutual funds companies and private equity firms
financial institutions
26
managing financial matters
financial management
27
the tools that helps a business daily operations
financial instruments
28
are funds that are available for a short-term
money market instruments
29
they are available most of the time and do not provide very high returns
money market instruments
30
•issued by the government •maturity within a year •not risky, because government must make an effort to pay
treasury bills (t-bills)
31
•issued by financial sound business to fund inventories and receivables •maturity is about o months •generally low default risk
commercial papers
32
•issued by banks or mutual funds companies •maturity date is not specific •default risk is low •usually invested in money market instruments, commercial papers, and treasuries
money market funds
33
is an example of long-term debt. it is a security reflecting the debts of a government or business debt
bond
34
another example of long-term debt that has longer than a money market instruments
note
35
•issued by the government •mature in two, five or ten years or move •bond price usually fall becoming less attractive as interest rates in the market rise
treasury nites and bonds
36
•issued by federal agencies and it is similar to treasuries •long-term maturity •low default risk
federal agency debt
37
•issued by the local government •long-term maturity •more risky than government securities
municipal bonds, local government bonds
38
•issued by corporation s •maturity in 40 years •more risky than government securities
corporate bonds
39
types of security that represents ownership in a corporation
stocks
40
•issued by corporation in exchange of ownership
preferred stock (preference share)
41
units of ownership in a public corporation
common stock (ordinary share)
42
the meeting places of suppliers and users of various types of funds that can make transaction directly
financial market
43
buyers and sellers negotiate and transact business directly without an intermediary
primary market
44
new securities to the general public and the first offering of stocks is called IPO or initial public offering
public offering
45
previously issued securities are bought and sold
secondary market
46
securities with short-term maturities are borrowed or loaned
money market
47
financial market for stocks for a long-term period
capital market
48
is an estimate of cost, revenues, and resources over a specified period, reflecting a reading of future financial conditions and goals
budget
49
it is made to estimate how much their revenue and expenses would be within a year
operating budget
50
It is displays the expected cash receipts and disbursements for an accounting period.
cash budget
51
compose of collection from receivables, proceeds from loans, issuance of new shares of stocks and advances from the stockholders
cash receipts
52
include payments to suppliers and other service providers, loans, and cash dividends
cash disbursement
53
current assets like casg, accounts receivable, inventories and prepaid expenses used in the operation of the business
working capital
54
is the difference between current assets and current liabilities
net working capital
55
is the average number of days to sell its inventory
days of inventory
56
the time it takes collect cash from the sale of the inventory
days of receivable
57
is a metric that expresses the time (measured in days) it takes for a company to convert its investment in inventory and other resources into cash flows from sales
cash conversion cycle
58
refers to the minimum level of current assets required by the firm to continue the operations of the business and to cover up all current liabilities
permanent or fixed working capital
59
difference between net working capital and permanent working capital. it can help the business to survive during the slack season
temporary working capital
60
involves the maintenance of a casg and marketable securities investment level which enables the company to meet its casg requirements and at the same time, optimize the income of idle funds
cash management
61
cash is needed for the day to day operation of business
transaction motivate
62
some banks requires a company to maintain a certain compensating balance for their depositing accounts and loans
contractual motive
63
firms hold casg to be ready incase of unwanted situation
precautionary motive
64
a company holds cash for others investment opportunities
speculative motive
65
use in determining the casg needs of the company
cash budget
66
providing credits to a customer is one way of increasing sales and gaining additional customers
receivables management
67
5 c's of credit can be used in credit evaluation
character capacity capital collateral condition
68
Is the borrower's willingness to pay the loan
character
69
is the borrower's ability to pay the loan
capacity
70
is the borrowers financial resources
capital
71
is the borrowers security pledge for the loan payment
collateral
72
is the current economic or business conditions
condition

REVIEWER (5 decks)

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