Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

chapt2 C&&C > FINMAN8 CHAP2 > Flashcards

FINMAN8 CHAP2 Flashcards

1
Q

not only managing a
company’s finances but managing them with the intention
to succeed—that is, to attain the company’s long-term goals
and objectives and maximize shareholder value over time.

A

Strategic financial management

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

must be utilized in order to sustain needs
and wants

A

Capital structure

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Refer to decisions that companies need to take regarding
what proportion of equity and debt capital to have in their
capital structure.

A

STRATEGIC FINANCING DECISIONS

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

is the particular combination of debt and equity
used by a company to finance its overall operations and growth

A

Capital structure

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Capital Structure examples:

A

Equity Capital
Preferred Stock
Debt
Other Sources

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

How do firms raise the funding
they need?

A

They borrow money (debt); internal / external financing

Sell ownership (stocks / equity)

Retained earnings (profit)

The financial manager must access all these sources and
choose the one most likely to help maximize firm’s value.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

types of financing

A

short-term financing
long-term financing

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

type of financing:

comes due within one
year

EX. Trade credit, bank
loans, commercial
paper

A

short-term financing

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

type of financing

  • due more than one year
  • They carry lower rates of
    interest and are fixed.
  • They require collateral
    to be provided.
  • They are riskier because
    the debt involved is
    huge
A

long-term financing

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

is an agreement or understanding between agents engaged in business with each other that allows the exchange of goods and services.

A

Trade Credit

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Advantages of trade credit

A

Easy to set up
Frees up working capital
Discounts for early payments
Fuels growth
Helps cashflow
Builds relationships

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Disadvantages of trade credit

A

Need for credit management
Risk of late payments
Potential supply chain complications
May affect creditworthiness
Some suppliers may refuse credit to start-ups
Expensive if payment date is missed

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

FACTORS INFLUENCING CAPITAL STRUCTURE

A

01 Business Risk
02 Company Tax Exposure
03 Financial Flexibility
04 Market Condition
05 Cost of Fixed Assets
06. Size of Business Org.
07. Sector of Business Org.
08. Others

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

is any exposure
a company or organization
has to factor(s) that may
lower its profits or cause it to
go bankrupt.

Ex. changes in consumer
taste and demand, the state
of the overall economy, and
government rules and
regulations

A

BUSINESS RISK

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

also called
corporation tax or company
tax, is a type of direct tax
levied on the income or
capital of corporations and
other similar legal entities

A

Corporate Tax

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

the ability of a firm to access
and restructure its financing
at a low cost

A

FINANCIAL
FLEXIBILITY

17
Q

including the number of
competitors, competitiveness
and market’s growth during
the situation for a firm that
enters the market or
introduces a new product.

A

MARKET
CONDITION

18
Q

examples of cost of fixed assets

A

vehicles
furnitures
building
hardware
license
land

19
Q

SIZE OF THE BUSINESS

A

MICRO = UP TO 3M = 1-9 EMPLOYEES

SMALL = 3M 1 PESOS-15M = 10-99 EMPLOYEES

MEDIUM = 15M 1 PESOS-100M = 100-199 EMPLOYEES

20
Q

is the possibility of losing money on an
investment or business venture. Some more common and
distinct financial risks include credit risk, liquidity risk, and
operational risk.

May lead to insolvency

A

Financial Risk

21
Q

IDENTIFY IF STRATEGY / TACTICS

high-level activity

A

STRATEGY

22
Q

IDENTIFY IF STRATEGY / TACTICS

short-term approach

A

TACTICS

23
Q

IDENTIFY IF STRATEGY / TACTICS

vision of the entity

A

STRATEGY

24
Q

IDENTIFY IF STRATEGY / TACTICS

deployed operational/project managers

A

TACTICS

25
Q

IDENTIFY IF STRATEGY / TACTICS

controlled by market/deals with external market forces .. outward-focused

A

STRATEGY

26
Q

IDENTIFY IF STRATEGY / TACTICS

relates to the business model

A

STRATEGY

27
Q

IDENTIFY IF STRATEGY / TACTICS

relates to the organizational objective

A

TACTICS

28
Q

IDENTIFY IF STRATEGY / TACTICS

involves portfolio activities of selecting the best-fit programs and projects

A

STRATEGY

29
Q

IDENTIFY IF STRATEGY / TACTICS

involves measures taken to effectively manage projects or operations

A

TACTICS

30
Q

IDENTIFY IF STRATEGY / TACTICS

growing sales, market leadership

A

STRATEGY

31
Q

IDENTIFY IF STRATEGY / TACTICS

efficient means of working, improving worker satisfaction, and reducing cost

A

TACTICS

32
Q

IDENTIFY IF STRATEGY / TACTICS

looks at hunting for the new

A

STRATEGY

33
Q

IDENTIFY IF STRATEGY / TACTICS

concerned with perfecting the present

A

TACTICS

34
Q

types of implementation of business

A

STRATEGY- long term
TACTIC- short term

35
Q

difference between financial and financing

A

FINANCIAL-money / sources of money
FINANCING- lending/borrowing

36
Q

has voting rights

A

PREFERRED STOCK

37
Q

combination of common and preferred stock

A

EQUITY CAPITAL

38
Q

example of other source in the Capital Structure

A

asset management decision = selling assets to generate capital

chapt2 C&&C (10 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions