FinalExam_Review

FinalExam_Review - FIN 301 - Corporate Finance Review...

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FIN 301 - Corporate Finance Review Sheet—Final Exam, Kimmel The exam will consist of multiple choice questions and problems. Make sure to review the problems worked in class and at least the practice problems from Homework Manager. You should understand the topical areas given in the following list—the concept questions will be primarily based on these topics. Note that just because a concept is on this list it will not necessarily be on the exam, nor will concepts not on this list be excluded from the exam. Overview of Financial Management – Chapter 1 o Why is it important to have some understanding of finance? What is the goal of financial management? o Understand the differences among the alternative forms of business. What are the advantages and disadvantages of each? In general, how is each taxed? o What are some of the goals that are pursued by corporations? Why should the primary goal of a financial manager be to try to maximize shareholder wealth? o Understand what agency relationships are. What are some ways shareholders can reduce agency problems? Financial Statements, Taxes and Cash Flows – Chapter 2 o Be familiar with the contents and layout of the Balance Sheet and Income Statement. What do they tell us? What problems/limitations do they have? o Average vs marginal tax rates o Understand cash flow, why they are important and how they differ from the Income Statement. Working with Financial Statements – Chapter 3 o Understand the general concepts associated with financial statements and ratio analysis. (Do not memorize any of the ratios!) What information does each of the five categories of ratios mentioned in the text provide to those who interpret the ratios? Who uses ratios? o Know the limitations associated with ratio analysis. Why is the interpretation of the ratios considered more important than the computation of the ratios? o Be familiar with the concepts of internal and sustainable growth, and the two things a company can do with profits (return to shareholders or retain them) Short Term Financial Planning – Chapter 16 o Understand the importance of working capital management. o
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FinalExam_Review - FIN 301 - Corporate Finance Review...

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