Bus 100 Ch 17

Bus 100 Ch 17 - Chapter 17 Financial Management and...

Info iconThis preview shows pages 1–7. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Chapter 17 Financial Management and Institutions L e a r n i n g G o a l s Identify the functions performed by a firms financial managers. Describe the characteristics and functions of money. Identify the various measures of the money supply. Explain how a firm uses funds. Compare the two major sources of funds for a business. Identify the likely sources of short- term and long-term funds for business operations. Describe the financial system and major financial institutions. Explain the Federal Reserve System and its tools. Describe the global financial system. 1 2 3 4 5 6 7 8 9 Finance Business function of planning, obtaining, and managing a companys funds in order to accomplish its objectives effectively and efficiently. THE ROLE OF THE FINANCIAL MANAGER Financial manager Executive who develops and implements the firms financial plan and determines the most appropriate sources and uses of funds. Chief financial officer Head of an organizations finance operation. Reports directly to CEO or COO. Often a member of the board of directors. Three executives typically report to the CFO: Vice president for financial management or planning Responsible for preparing financial forecasts and analyzing major investment decisions. Treasurer Responsible for all of the companys financing activities, including cash management, tax planning and preparation, and shareholder relations. Controller Chief accounting manager; keeps the companys books, prepares financial statements, and conducts internal audits. Often balance risk with expected financial returns: R isk U ncertainty of gain or loss R ew ard G ain or loss from an investm ent over a specified period of tim e Risk-return trade-off Optimal balance between the expected payoff from an investment and the investments risk. Risk Uncertainty of gain or loss Reward Gain or loss from an investment over a specified period of time The Financial Plan Financial plan Document that specifies the funds a firm will need for a period of time, the timing of inflows and outflows, and the most appropriate sources and uses of funds. Built based on the answers to three questions: What funds will the firm require during the appropriate period of operations? How will it obtain the necessary funds? When will it need more funds? Also involves financial control, the process of checking actual revenues, costs, and expenses and comparing them against forecasts. CHARACTERISTICS AND FUNCTIONS OF MONEY Characteristics of Money Money Anything generally accepted as payment for goods and services. To be efficient, money must have certain characteristics: Divisibility Allows for easy exchange of a wide variety of products....
View Full Document

Page1 / 35

Bus 100 Ch 17 - Chapter 17 Financial Management and...

This preview shows document pages 1 - 7. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online