FIL 240 notes

FIL 240 notes - * Primary goal of a firm is to increase...

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Chapter 1 Finance: The study of sources and uses of money. Financial Management: Acquisition, management and financing of the firm’s resources using money. *3 Main decisions: -Capital Budgeting- Long term assets -Capital Structure- Long- Term Debts/ Liabilities -Working capital management- Managing the current assets and liabilities Treasure: cash management, expenditures; typically external finances Controller: cost accounting, taxes, info systems; typically in charge of internal finances. Common Stock: A financial instrument that represents ownership in a corporation. Dividends: A distribution of a firm’s earnings.
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Unformatted text preview: * Primary goal of a firm is to increase (maximize) the stock price. Not to just maximize profits! Reason being, profit maximization fails to ignore risk, time value, size of cash flows. Partnership: -At least 2 people-General partner works the operation-Limited partner(s) front the cash-Provisions should always be in a written contract-Advantages: easy to start, more capital available, taxed once as income-Disadvantages: Unlimited liability for general, partnership dissolves if one dies or sells there part, difficult to transfer ownership....
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