chp 1

Question 1

what is financial management

Answer 1

concerned with making financial decisions that influence and effect worth of the firm
relates to the creation or sustenance of the economic value of the firm

Question 2

apa lagi financial management

Answer 2

covers the use of the best methods to evaluate various alternatives and make the best decision thereon

Question 3

eqn

Answer 3

total assets (non-current assets + current assets) = total liabilities (current + long term) + shareholders equity

Question 4

Financial management knowledge is important to a firm to answer the following questions:

Answer 4

• what sort of fixed assets should a firm invest in
• how shall firm raise the necessary funding to finance the capital expenditure once a decision has been made (the type fixed assets or business opportunity to invest in?)
• how shall a firm manage its short term operating cash flow)

Question 5

hierarchies

Answer 5

board of director

other dept. cfo. other dept

      treasurer.   controller

Question 6

treasurer duties

Answer 6

1. capital budgeting and expenditures
2. financial planning
3. sourcing and raising funds
4. cash management
5. credit management
6. management of foreign currencies
7. risk management

Question 7

controller duties

Answer 7

1. financial statement
2. cost and management accounting
3. firm taxes

Question 8

capital budgeting and capital expenditure

Answer 8

employ appraisal techniques such as payback, internal rate of return, and net present value to examine the viability and attractiveness of proposal investments, projects and products

Question 9

financial planning

Answer 9

contribute in corporate planning and development of financial policy

Question 10

source and raise funds

Answer 10

plan and raise financing via money markets and capital markets

Question 11

cash and credit management

Answer 11

look after the firm’s cash needs, banking and management of security system of cash

Question 12

perform risk management exercise

Answer 12

undertake appropriate risk management in firm
eg price risks may be managed by using financial derivatives such as forward futures option and swaps

Question 13

role of account manager (SATU)

Answer 13

produce regular financial statements
-statement of financial position
-income statement
-statement of cash flows

Question 14

role of account manager (DUA)

Answer 14

perform cost and management accounting role
-to provide regular management accounting information
-the planning of monitoring of daily and monthly activities can be performed

Question 15

role of account manager (TIGA)

Answer 15

comply with taxation requirements
-completing the various tax returns, collection of indirect tax
-remittances (a sum of money sent in payment or as a gift ) of tax revenues to the inland revenue broad -lembaga hasul dlm negeri

Question 16

role of financial manager (TIGA)

Answer 16

acts as intermediary between the firm’s operation and the financial markets

Question 17

In whose interests does the firm run?

Answer 17

stakeholders

Question 18

goal of the firm

Answer 18

maximize the wealth of shareholders

Question 19

practical reason

Answer 19

biasanyaaa senang ja pun buat investment decision utk firm simple ja tapi kalau ada interest of shareholder d considerkan dia agak complicated la

Question 20

legal reason

Answer 20

-shareholder are the owners of the firm
-they are protected by the provisions of the companies act, 2016
-finance manager owe some kind of allegiance to the owners of the firm

Question 21

other goal of the firm

Answer 21

-maximize sales or market share
-minimize cost
-maximize profit
-achieve adequate profits
-ensure continued earnings growth (with minimum % growth targets)
-catch up and overtake competitors
- avoid financial distress and bankruptcy
-survive
-limit working hours and days in a week
-achieve high reputation for product quality and service
-achieve good employer-employee relations
-be environmentally friendly-do not pollute
-be ethical

Question 22

agency problem

Answer 22

for larger firm, banyak ba shareholder jadi banyak jugak ownership. so nda semua shareholder akan ikut serta manage and running the business. jadi siapa yg manage jawapannya management team

Question 23

agency relationship / principal-agent relationship

Answer 23

exists when one party (principal) engages with woth another party (agent) act in the agent’s interest

Question 24

ownership of the firm siapa

Answer 24

shareholder

Question 25

control management siapa

Answer 25

management team

Question 26

Agency costs are incurred by the firm, when:

Answer 26

1. managers do not attempt to maximize firm value
2. shareholder incur costs to monitor the manager and influences their action

Question 27

potential solution to the agancy problem

Answer 27

1. Provisions in the company Act, 2016
2. selling share and threat of takeover
3. information flow
4. linking management remuneration improvement of shareholder’s wealth