Intro to Financial Mgmt

Question 1

Identify some of the responsibilities of the financial management function of an entity.

Answer 1

Managing the capital and financial structure of the entity;
Planning, allocating and controlling an entity’s financial resources;
Identifying and managing financial risks faced by the entity.

Question 2

What is the ultimate objective of the financial management function in a profit-oriented entity?

Answer 2

The ultimate objective of financial management is to maximize the value of the entity, usually as reflected by the market price for the firm’s stock.

Question 3

___ ___ is the identification and implementation of strategies designed to maximize a firm’s value

Answer 3

Financial management

Question 4

Financial management includes what 3 types of activities?

Answer 4

A. Managing the capital and financial structure of an entity, including the sources and uses of funds;
B. Planning, allocating and controlling an entity’s financial resources;
C. Identifying and managing financial risks.

Question 5

Financial Management involves decisions and activities with both ___ ___ and ___ ___ implications.

Answer 5

short-term and long-term implications.

Question 6

Financial Management includes the use of ___ to assess effectiveness.

Answer 6

ratios

Question 7

Dividend policy is a___ ___ financial management activity or concern.

Answer 7

long-term

Question 8

Financial management is concerned with the efficiency and effectiveness of both the ___ ___ ___ and the ___ of these resources.

Answer 8

acquisition of financial resources; use

Question 9

___ ___ ___ accounts are used in international economics to account for transactions with foreign nations; they are not used in financial management.

Answer 9

Balance of payment

Question 10

Neither trade accounts payable nor inventories are considered ___ ___ issues;

Answer 10

long-term

Question 11

Capital budgeting is considered a ___ ___ issue.

Answer 11

long-term