Solutions

Solutions - Part 1 Introduction to Managerial Finance...

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Unformatted text preview: Part 1 Introduction to Managerial Finance Chapters in this Part Chapter 1 The Role and Environment of Managerial Finance Chapter 2 Financial Statements and Analysis Chapter 3 Cash Flow and Financial Planning Integrative Case 1: Track Software, Inc. Chapter 1 The Role and Environment of Managerial Finance Instructor’s Resources Overview This chapter introduces the student to the field of finance and explores career opportunities in both financial services and managerial finance. The three basic legal forms of business organization (sole proprietorship, partnership, and corporation) and their strengths and weaknesses are described, as well as the relationship between major parties in a corporation. The managerial finance function is defined and differentiated from economics and accounting. The chapter then summarizes the three key activities of the financial manager: financial analysis and planning, investment decisions, and financing decisions. A discussion of the financial manager’s goals—maximizing shareholder wealth and preserving stakeholder wealth—and the role of ethics in meeting these goals is presented. The chapter includes discussion of the agency problem— the conflict that exists between managers and owners in a large corporation. Money and capital markets and their major components are introduced in this chapter. The final section covers a discussion of the impact of taxation on the firm’s financial activities. This chapter, and all that follow, emphasize how the chapter content plays a vital role in the student’s professional and personal life. Each chapter includes an early discussion of the relevance of the topic to majors in accounting, information systems, management, marketing, and operations. Throughout each chapter are detailed examples of how the chapter’s topic relates to the student's financial life. These pedagogic tools should motivate students to quickly grasp an understanding of the chapter content and employ it in both their professional and personal lives. Study Guide The following Study Guide example is suggested for classroom presentation: 2 Gitman • Principles of Managerial Finance, Twelfth Edition Example Topic 1 Earnings per share Chapter 1 The Role and Environment of Managerial Finance 3 3 Income tax calculation 4 Gitman • Principles of Managerial Finance, Twelfth Edition Suggested Answer to Chapter Opening Critical Thinking Question What additional concerns might a chief financial officer (CFO) face when a company expands into international markets? Starbucks must be aware of the differences in regional cultures as they relate to coffee drinking habits. Beyond currency risk, when expanding internationally, Starbucks must be aware of local tax issues, personnel considerations, and local bureaucracies and regulations. Recently, of course, security concerns have become increasing important in some areas of the world. These issues can vary considerably from one area of the globe to another. Not all of these concerns fall solely upon the shoulders of the CFO, but one area of the globe to another....
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This note was uploaded on 01/29/2011 for the course FIN 311 taught by Professor Lee during the Spring '10 term at FSU.

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Solutions - Part 1 Introduction to Managerial Finance...

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