Chapter 18

Chapter 18 - Chapter18 19:52

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Chapter 18 19:52 Finance : The function in a business that acquires funds for the firm and  manages those funds within the firm Financial management : The job of managing a firm’s resources so it can meet  its goals and objectives Financial managers : Managers who examine financial data prepared by  accountants and recommend strategies for improving the financial performance  of the firm The three most common reasons a firm fails financially are : 1 . Undercapitalization (insufficient funds to start the business) 2 . Poor control over cash flow 3 . Inadequate expense control Optimizing the firm’s profitability and make the best use of its money: 1 . Forecasting the firm’s short-term and long-term financial needs 2 . Developing budgets to meet those needs 3 . Establishing financial controls to see whether the company is achieving goals Short-term forecast : Forecast that predicts revenues, costs, and expenses for a  period of one year or less Cash flow forecast : Forecast that predicts the cash inflows and outflows in 
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Chapter 18 - Chapter18 19:52

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