The Corporate Finance Framework & Environment Flashcards
What is a company
A company is an entity established to conduct business activity
What’s the structure of a group company
The structure of a group company is:
- Parent company
- Subsidiary company
What does a parent company control
Parent company controls subsidiaries
Who do subsidiary companies operate under
Subsidiary companies operate under the parent company
Who are companies managed by
Companies are managed by a Board of Directors
Who owns companies
Shareholders own companies
What do shareholders have in a company
Shareholders have:
- Limited Liability
- Voting Rights
- Dividend Rights
What does limited liabilities protect
Limited liability protects personal assets
Where can shareholders vote
Shareholders can vote at company meetings
What do dividend rights mean for shareholders
Dividend rights means shareholders are entitled to a share of profits
Where can shares be listed
Shares can be listed on the stock exchange
What do share prices reflect
Share prices reflect market value
What do company announcements affect
Company announcements affect investor confidence
What is the financing decision
The financing decision is choosing the source of finance
What is the investment decision
The investment decision is selecting profitable investments
What is the dividend decision
The dividend decision is deciding dividend decision
What does return to providers of finance ensure
Return to providers of finance ensures fair returns
What does the Board of directors oversee
The board of directors oversees financial strategy
What does the Chief Financial Officer (CFO) oversee
The CFO leads financial planning
What does the financial accountant manage
The financial accountant manages historical financial statements
What does financial manager focus on
Financial manager focuses on future strategy and risk
What do management accountants handle
Management accountants handle internal historic accounts
What are the financial manager responsibilities in listed companies
Financial manager responsibilities in listed companies are:
- Cash Flow & Profit Forecasting
- Short-term Financing and Cash Management
- Hedging Risks
- Investment appraisal
- Long-term Financing Decisions
- Dividend Decision Support
What does cash flow & profit forecasting ensure
Cash flow & profit forecasting ensures liquidity
