Lesson 1 Flashcards
(T/F) Finance is the science and art of managing money and is concerned with individual’s decisions about how much of their earnings they spend, how match the save, and how they invest their savings.
T
(T/F) Managerial finance is the area of finance concerned with the design and delivery of ADVICE and financial products to individuals businesses and governments.
(F)
* Financial Services
Two Career Opportunities in Finance.
A.) Financial Services & Managerial finance
B.) Financial Services & Managerial Services
C.) Financial finance & Managerial finance
D.) Financial finance & Managerial Services
A.) Financial Services & Managerial finance
(T/F) Managerial finance is concerned with the DUTIES of the financial MANAGER working in a business.
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Prepares the firm’s financial PLAN and budgets.
A.) Credit analyst/manager
B.) Cash manager
C.) Financial analyst
D.) Capital expenditures manager
C.) Financial analyst
Evaluates and recommends proposed long-term investments. May be involved in the financial aspects of IMPLEMENTING approved investments.
A.) Cash manager
B.) Financial analyst
C.) Capital expenditures manager
D.) Credit analyst/manager
C.) Capital expenditures manager
Manages specific FOREIGN operations and the firm’s exposure to fluctuations in exchange rates.
A.) Foreign exchange manager
B.) Pension fund manager
C.) Credit analyst or manager
D.) Cash manager
A.) Foreign exchange manager
The one who checks if creditors are qualified.
A.) Credit manager
B.) Credit analyst
C.) Cash manager
D.) Financial analyst
A/B - Credit analyst / manager
The one who maintains and controls the firm’s daily cash balances.
A.) Capital expenditures manager
B.) Cash manager
C.) Project finance manager
D.) None of the above
B.) Cash manager
A business owned by one person and operated for his or her own profit.
Sole proprietorship
An entity created by law.
Corporation
A business owned by two or more people and operated for profit.
Partnership
It is the condition a sole proprietorship or general partnership, giving creditors the right to make claims against the owner’s personal assets to recover debts owed by the business
Unlimited Liability
It is a written contract used to formally establish a business partnership.
Articles of partnership
A corporate official that is responsible for managing the firm’s day-to-day operations and carrying out the policies established by the BOD.
President or CEO
Periodic distributions of cash to the stockholders of a firm.
Dividends
The owners of a corporation
Stockholders
A legal provision that limit stockholders liability for a corporations depth to the amount they initially invested in the film by purchasing stock.
Limited liability
The purest and most basic form of corporate ownership.
Common stock
Group elected by the firm stockholders and typically responsible for approving strategic goals and plans, setting general policy, guiding corporate affairs, and approving major expenditures.
Board of directors (BOD)
What are the two managers under the Vice President of Finance or CFO?
Treasurer and Controller
An autonomous and duly registered association of persons with a common bond of interest, who have voluntarily joined together to achieve a lawful common social or economic end.
Cooperative
Four legal forms of business organization.
Sole proprietorship, partnership, corporation, and cooperative
Form of legal business organization where in the owner receives all the profit and sustains all losses
Sole proprietorship
Legal form of business organization where they can raise more funds than sole proprietorships. They borrow power enhanced by more owners.
Partnership
A legal form of business organization where the owners have limited liability which guarantees that they cannot lose more than they invested. They can achieve large size by a single of ownership or stock and has a long life of firm. They also has better access to financing.
Corporation
The owner/s of this legal form of business organization has unlimited liability.
Sole proprietorship and partnership
A legal form of business organization wherein it is the most expensive to organize and has greater government regulations and requires financial results.
Corporation
What is the goal of the firm?
The goal of the firm and of the managers is to maximize the WEALTH of the owners for whom it is being operated which in most instances is equivalent to maximizing the STOCK PRICE
It is the chance that actual outcomes may differ from those expected.
Risk
It requires compensation to bear risk
Risk Averse
It is the amount earned during the period on behalf of each outstanding share of common stock calculated by dividing the periods total earnings available for the firm’s common stockholders by the number of shares of common stock outstanding.
Earnings per Share (EPS)
Groups such as employees, customers, suppliers, creditors, owners, and others who have a direct economic linked to the firm
Stakeholders
The firm’s chief accountant is responsible for the firm’s accounting activities, such as corporate accounting, tax management, financial accounting, and cost accounting.
Controller
The firm’s chief financial manager, who manages the firm’s cash overseas expansion plans, and manages key risks.
Treasurer
Under the treasurer, it is the manager of responsible for managing and monitoring the firm’s exposure to loss from CURRENCY fluctuations.
Foreign exchange manager
What is the relationship of finance to economics?
And be alert to the consequences of variety levels of economic activity and changes in economic policy they must also be able to use economic theories as guidelines for efficient business operations such as the supply and demand analysis, profit maximization, and price theory.
What is the relationship of finance to accounting?
In small firms, accountants often carry out the finance function; however in large firms, financial analyst often help compile accounting information there are however two differences between finance and accounting One is related to the emphasis on cash flows and the other is related to decision making.
