Finance and Financial Management Flashcards
is always of great importance, be it in a business or in one’s everyday life. It is important to manage risks in business, it is equally important to manage risks in life as well. Risk is nothing but an uncertain event that might damage your assets and when it is financial risks, it creates loss of Finance. Some books define Finance as the science and art of managing money. (Gitman & Zutter, 2012)
Finance
deals with that decisions that are supposed to maximize the value of shareholder’s wealth (Cayanan). These decisions will ultimately affect the markets perception of the company and influence the share price.
Financial Management
The roles of each position identified.
- Shareholders
- Board of Directors
- President (Chief Executive Officer)
- VP for Marketing
- VP for Production
- VP for Administration
The s_____h_____ elect the Board of Directors (BOD). Each share held is equal to one voting right. Since the shareholders elect the BOD, their responsibility is to carry out the objectives of the shareholders. Otherwise, they would not be elected in that position.
- Shareholders
is the highest policy making body in a corporation. The board’s primary responsibility is to ensure that the corporation is operating to serve the best interest of the stockholders. The following are among the responsibilities of the board of directors:
- Board of Directors
in a corporation may vary from one company to another. Among the responsibilities of a president are the following:
a. Approving the information and other disclosures reported in the financial statements.
Overseeing the operations of a company and ensuring that the strategies as approved by the board are implemented as planned. b. Performing all areas of management: planning, organizing, staffing, directing and controlling
c. Representing the company in professional, social, and civic activities.
- President (Chief Executive Officer)
The following are among the responsibilities: a. Formulating marketing strategies and plans. Directing and coordinating company sales.
b. Performing market and competitor analysis.
c. Analyzing and evaluating the effectiveness and cost of marketing methods applied.
d. Conducting or directing research that will allow the company identify new marketing opportunities, e g. variants of the existing products/services already offered in the market.
e. Promoting good relationships with customers and distributors. (Cayanan, 2015)
- VP for Marketing
The following are among the responsibilities:
a. Ensuring production meets customer demands.
b. Identifying production technology/process that minimizes production cost and make the company cost competitive.
c. Coming up with a production plan that maximizes the utilization of the company’s production facilities.
d. Identifying adequate and cheap raw material suppliers. (Cayanan, 2015)
- VP for Production
The following are among the responsibilities:
a. Coordinating the functions of administration, finance, and marketing departments.
b. Assisting other departments in hiring employees.
c. Providing assistance in payroll preparation, payment of vendors, and collection of receivables.
d. Determining the location and the maximum amount of office space needed by the company. Identifying means, processes, or systems that will minimize the operating costs of the company. (Cayanan, 2015)
- VP for Administration
is to determine the appropriate capital structure of the company. Capital structure refers to how much of your total assets financed by debt and how much is financed by equity.
VP for Finance/Financial Manager
refers to how much of your total assets financed by debt and how much is financed by equity.
Capital structure
What are the functions of Financial Managers?
1.Financing decisions
2.Investing Decisions
3. Operating Decisions
4. Dividend Policies
include making decisions as to how to finance long-term
investments and working capital-which deals with the day-to-day operations of the
company.
- Financing decisions
To minimize the probability of failure, long-term investments
have supported by a capital budgeting analysis.
- Investing Decisions
deal with the daily operations of the company especially on
how to finance working capital accounts such as accounts receivable and inventories.
- Operating Decisions
