Chapter 1 Essentials Flashcards
Chapter one is an overview of what?
Financial Management
Cash is the what of any corporation?
Bloodline
Cash is crucial to three key activities:
Financing, Investing, Operations
The financial manager is at the what of cash management activities
Centre
The cash flow cycle is also called the what?
Cash Conversion Cycle
Cash comes into a firm in these two ways
Equity Investments and Loans
Cash goes out of a firm as these two things
Dividends and Repayments
Cash is INVESTED. In what that helps to create inventory and generate sales
Fixed Assets
Cash used in operating the business such as paying suppliers, other expenses, generating inventory, etc. is often generated by on what
Credit
Four main duties of financial managers
1 assessing the current business
2 assessing future financing needs
3 developing long-term financial strategies
4 assessing future investments
What is the key question facing financial managers?
How can they help create value for shareholders
Operating managers, potential investors, investment analysts, credit rating agencies, competitors, etc. are people who have a what?
Non-Financial Perspective on Financial Management
The role of whom is it to support financial managers by identifying data related to the activities of the firm and presenting them in a standardized way
Accountants
Types of firms
Sole proprietorship, partnership, corporation
The financial management framework 3 key messages
1 understand the external environment first
2 understand financial implications of cash activities
3 know how a firm attempts to grow while managing risk in order to create value
