Business organization and finance pdf
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- Business ethics
- Financial Management - Meaning, Objectives and Functions
- Business Organization and Finance: Legal and Economic Principles
- Business Organization.pdf
These slides are prepared solely for the teaching purpose. Importance of Business Organisation:.
Finance involves the evaluation, disclosure, and management of economic activity and is crucial to the successful operation of firms and markets. Finance involves the evaluation, disclosure, and management of economic activity and is crucial to the successful and efficient operation of firms and markets.
Managerial finance concerns itself with the managerial significance of finance. It is focused on assessment rather than technique. For instance, in reviewing an annual report, one concerned with technique would be primarily interested in measurement. They would ask: is money being assigned to the right categories? Were generally accepted accounting principles GAAP followed? They may look at changes in asset balances and probe for red flags that indicate problems with bill collection or bad debt as well as analyze working capital to anticipate future cash flow problems.
Sound financial management creates value and organizational ability through the allocation of scarce resources amongst competing business opportunities.
It is an aid to the implementation and monitoring of business strategies and helps achieve business objectives. Corporate finance is the area of finance dealing with monetary decisions that business enterprises make and the tools and analysis used to make those decisions. The primary goal of corporate finance is to maximize shareholder value. Although it is in principle different from managerial finance, which studies the financial decisions of all firms, rather than corporations alone, the main concepts in the study of corporate finance are applicable to financial problems of all kinds of firms.
The discipline can be divided into long-term and short-term decisions and techniques. Capital investment decisions are long-term choices about which projects receive investment, whether to finance that investment with equity or debt, and when or whether to pay dividends to shareholders. On the other hand, short-term decisions deal with the short-term balance of current assets and current liabilities; the focus here is on managing cash, inventories, short-term borrowing, and lending such as the terms on credit extended to customers.
The terms corporate finance and corporate financier are also associated with investment banking. Wall St. Financial managers ensure the financial health of an organization through investment activities and long-term financing strategies. Financial managers perform data analysis and advise senior managers on profit-maximizing ideas. Financial managers are responsible for the financial health of an organization.
They produce financial reports, direct investment activities, and develop strategies and plans for the long-term financial goals of their organization. Financial managers typically:. The role of the financial manager, particularly in business, is changing in response to technological advances that have significantly reduced the amount of time it takes to produce financial reports. They often work on teams, acting as business advisors to top executives. Financial Statements : This is an example of a financial statement that financial managers are responsible for preparing and interpreting.
Financial managers also do tasks that are specific to their organization or industry. For example, government financial managers must be experts on government appropriations and budgeting processes, and healthcare financial managers must know about issues in healthcare finance.
Moreover, financial managers must be aware of special tax laws and regulations that affect their industry. Capital investment decisions are long-term corporate finance decisions relating to fixed assets and capital structure. Decisions are based on several inter-related criteria.
Corporate management seeks to maximize the value of the firm by investing in projects which yield a positive net present value when valued using an appropriate discount rate in consideration of risk.
These projects must also be financed appropriately. If no such opportunities exist, maximizing shareholder value dictates that management must return excess cash to shareholders i. Capital investment decisions thus comprise an investment decision, a financing decision, and a dividend decision.
Management must allocate limited resources between competing opportunities projects in a process known as capital budgeting. Making this investment decision requires estimating the value of each opportunity or project, which is a function of the size, timing and predictability of future cash flows.
Achieving the goals of corporate finance requires that any corporate investment be financed appropriately. The sources of financing are, generically, capital self-generated by the firm and capital from external funders, obtained by issuing new debt or equity. There are distinct types of financial managers, each focusing on a particular area of management.
Controllers also are in charge of preparing special reports required by governmental agencies that regulate businesses. Often, controllers oversee the accounting, audit, and budget departments. They carry out strategies to raise capital and also develop financial plans for mergers and acquisitions. They set credit-rating criteria, determine credit ceilings, and monitor the collections of past-due accounts.
Analytical skills. Financial managers increasingly assist executives in making decisions that affect the organization, a task for which they need analytical ability. Excellent communication skills are essential because financial managers must explain and justify complex financial transactions.
Attention to detail. In preparing and analyzing reports such as balance sheets and income statements, financial managers must pay attention to detail. Math skills. Financial managers must be skilled in math, including algebra. An understanding of international finance and complex financial documents also is important. Organizational skills. Financial managers deal with a range of information and documents.
Key Takeaways Key Points The primary goal of corporate finance is to maximize shareholder value and it deals with the monetary decisions that business enterprises make. Sound financial management creates value and organizational ability through the allocation of scarce resources.
Key Terms dividends : Dividends are payments made by a corporation to its shareholder members. It is the portion of corporate profits paid out to stockholders. The Role of Financial Managers Financial managers ensure the financial health of an organization through investment activities and long-term financing strategies.
Learning Objectives Outline the various roles played by financial managers. Key Takeaways Key Points Financial managers perform data analysis and advise senior managers on profit -maximizing ideas. Types of financial managers include controllers, treasurers, credit managers, cash managers, risk managers and insurance managers.
Key Terms net present value : The present value of a project or an investment decision determined by summing the discounted incoming and outgoing future cash flows resulting from the decision.
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Financial Management - Meaning, Objectives and Functions
A start-up business presents a higher risk investment than a mature business. Seed Financing Phase The seed phase, also known as the pre-commercialization stage, is the proof-of-concept stage in which a business idea is tested for its viability. At this stage, the basic research may have been completed, but the commercial capabilities are not yet proven. Generally, a formal business entity has not been formed because the decision of whether to move forward with creating a business has not been decided. Pre-launch Financing Phase The pre-launch phase occurs after the decision has been made to move forward with the creation of a business. In this phase, the foundation for the business is created. Critical at this time is the development of a detailed business plan explaining how the business will be created and function.
[PDF] Download Business Organization and Finance: Legal and Economic Principles, 11th Edition (Concepts and Insights) Ebook | READ ONLINE More Info.
Business Organization and Finance: Legal and Economic Principles
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Business ethics also known as corporate ethics is a form of applied ethics or professional ethics , that examines ethical principles and moral or ethical problems that can arise in a business environment. It applies to all aspects of business conduct and is relevant to the conduct of individuals and entire organizations. These norms, values, ethical, and unethical practices are the principles that guide a business.
Financial Management means planning, organizing, directing and controlling the financial activities such as procurement and utilization of funds of the enterprise. It means applying general management principles to financial resources of the enterprise.
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Finance involves the evaluation, disclosure, and management of economic activity and is crucial to the successful operation of firms and markets. Finance involves the evaluation, disclosure, and management of economic activity and is crucial to the successful and efficient operation of firms and markets. Managerial finance concerns itself with the managerial significance of finance. It is focused on assessment rather than technique.
Finance is one of the major pillars of any organisation and an essential ingredient to a successful business. Nowadays, a finance department has a broad range of roles to carry out within or outside an organization. The performance and success of any company greatly depend on how well the finance is handled. Keeping a close watch on the financing function is very important for the smooth operation of a company. The term, finance has to be understood clearly as it has different meaning and interpretation in various contexts. To Fabozzi et al.
Business Organization And Finance Legal And Economic Principles 11th Edition Concepts And Insight. Danilla Arimbi. Loading Preview. Sorry, preview is.
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