lesson 1 Flashcards
It is important to manage risks in business
Finance
Maximize the value of share stocks
Financial management
Important especially in the financial aspect of the business
Organizational structure
Elects the board of directors, each share held is equal to one boting right
Shareholders
Highest policy making body in corporation
Board of Directors
Approving the information and other disclosures reported in the financial statements
President (Ceo)
Formulating marketing strategies and plans.
Vp for marketing
Ensuring production meets customer demands.
Vp for production
Coordinating the functions of administration, finance, and marketing departments.
Vp for administration
determine the appropriate capital structure of the company.
Vp for finance
refers to hos much of your total assets financed by debt and how much is financed by equity.
Capital structure
bought using cash from our pockets,
Equity
used money from our borrowings,
Debt
long-term investments and working capital-which deals with the day-to-day operations of the company.
Financing decisions
minimize the probability of failure,
Investing decisions
deal with the daily operations of the company, accounts receivable and inventories
Operating decisions
part of profits that are available for distribution, to equity shareholders.
Dividend policies
financial sector that provide a broad range of business and services including banking, insurance, and investment management.
Financial institutions
deposit funds at commercial banks, which use the deposited funds to provide commercial loans to firms
Commercial banks
Individuals purchase (life, property and casualty, and health) protection with insurance premiums.
Insurance companies
owned by investment companies that enable small investors to enjoy the benefits of investing
Mutual funds
Financial institutions that receive payments from employees and invest the proceeds on their behalf.
Pension funds
real or a virtual document representing a legal agreement involving some sort of monetary value.
Financial instrument
any contract that evidences a residual interest in theassets of an entity after deducting all liabilities.
Equity instrument
generally have fixed returns due to fixed interest rates.
Debt instrument
These bonds and bills have usually low interest rates and have very low risk of default since the government assures that these has been paid.
Treasury bonds and treasury bills
has priority over a common stock inters of claims overthe assets of a company.
Preferred stock
on the other hand are the real owners of the real company.
Common stock
refers to a marketplace, where creation and trading of financial assets,
Financial market
refers to a marketplace, where creation and trading of financial assets,
Financial market
The sale of new securities to one investor or a group of investors (institutional investors)
Primary / Private placement
sale of previously owned ianaf securities takes place in
Secondary market
is both a primary and secondary market.
Philippine stock exchange (PSE)
is both a primary and secondary market.
Philippine stock exchange (PSE)
are a venue wherein securities with short-term maturities (1 year or less) are sold.
Money market
Securities with long term maturities
Capital markets
Securities with long term maturities
Capital markets
