Financial Management Flashcards
What’s Finance about?
Managing the sources and uses of funds
Financial management
Planning for a firm’s money needs and managing the allocation and spending of funds
Accountants role in financial management
Collect, interpret, and present financial data
Generally historical
Financial Managers
Use financial data and other information prepared by the accountants to make financial decisions
Internal Sources of funds
Revenue from sales
Investment income
Revenue from selling assets
External sources of funds
Credit cards Trade credit Secured loans Unsecured loans Commercial paper Factoring Leases Corporate bonds Equity
Uses of funds
Payroll Taxes Dividends Debt repayment Rent Utilities Real estate and facilities Equipment Parts and materials Supplies Professional services Advertising and other marketing Training Research Acquisitions Investments
Accounts receivable
Amounts that are current owed to a firm
Accounts payable
Amounts that a firm currently owes to other parties
Three Fundamental Concepts of Personal Finance
Value of money is always changing
Small sacrifices early in life can produce big payoffs
Every decision involves trade-offs
