Goals of Financial Management

Goals of Financial - resources are from debt securities and equity securities that are issued thru the primary market(newly issued securities or

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Goals of Financial Management Financial management involves how a business or a firm manages their financial assets, debts securities, and equity securities. These firms can be in any of the following legal forms; the sole proprietorship, the partnership, and the corporation. Each form has its pros and cons, but generally the corporation will be ideal for a large business that consists of large amounts of employees’ and resources. The financial management goals of these different legal forms could be different but are usually similar. Each form of business enterprise needs to consider how to gather their financial resources and what to invest with the gathered financial resources. This process is different for each legal form. In a sole proprietorship, the financial resources are usually money invested by the firm’s proprietor. In a partnership, the financial resources are from the general partner(s) and if available, the limited partner(s). The corporation is by far, the most complicated as it involves more people. Its financial
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Unformatted text preview: resources are from debt securities and equity securities that are issued thru the primary market (newly issued securities) or thru the secondary market (auction markets or dealer markets), such as the New York Stock Exchange (NYSE) and the National Association of Securities Dealers Automated Quotation (NASDAQ). Generally, the goal is to increase the firms’ value by generating more cash inflow than cash outflow, but this is usually the case for the owners of the firms (such as the proprietor in the “sole proprietorship”, the partners in the “partnership”, and the stockholders in the “corporation”). Arguments on whether the stockholders in a corporation control the financial managerial behavior however have been constantly questioned. Some think the managerial goals in corporations may be different from those of stockholders. Their goals might be for survival for the firm and for independence and self sufficiency to make decisions without encountering external parties....
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This note was uploaded on 03/21/2008 for the course FIN 357 taught by Professor Hadaway during the Fall '06 term at University of Texas at Austin.

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Goals of Financial - resources are from debt securities and equity securities that are issued thru the primary market(newly issued securities or

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