fm nga prelims Flashcards
the art and science of managing money.
finance
all individuals ang organizations earn or
raise money and spend or invest money
finance
It is concerned with the process, institutions, markets and instruments involved in the transfer of money among individuals, business and governments.
finance
the lifeblood of an organization.
finance
It is a common thread, which binds all the organizational functions as each function when carried out creates financial implications.
finance
the key to success business operations.
financial management
Itis concerned with the acquisition, financing and management of assets with some overall goals in mind.
financial management
FM CAN BE DIVIDED INTO THREE MAJOR DECISIONS:
- Investing
- Financing
- Dividend decision
the allocation of financial resources, time, or other assets to pursue economic activities that have the potential to generate profits or fulfill long-term objectives.
investing
Involves the commitment of funds to acquire or develop assets, expand operations, conduct research and development, or invest in human capital.
investing
It is defined as the money spent on creating.
investing
Is the process of providing funds for business activities, making purchases, or investing.
financing
_____ are in the business of providing capital to businesses, consumers, and investors to help them achieve their goals.
financial institutions
part of profits, that are available for distribution, to equity shareholders.
dividend
it should be analyzed in relation to the financial decision of a firm.
payment of dividends
a firm is faced with the problem of declaring dividend or postponing dividend declaration, this is a problem of internal financing.
dividend decision
GOALS/OBJECTIVES OF FM
profit maximization & wealth maximization
This means that the finance manager has to make decision in a manner that the profit is maximized.
profit maximization
A process by which a firm determines the price, input and output levels that will lead to the highest possible profit
profit maximization
Also known as Net Present Worth Maximization.
wealth maximization
Means maximizing the shareholder’s wealth due to an increase in share price, thereby increasing the company’s market capitalization.
wealth maximization
The share price increase directly affects how competitive the company is, its positioning, growth strategy, and profits.
wealth maximization
