Unformatted text preview: ance.
Which legal form of business organization is most common? Which form
is dominant in terms of business receipts and net profits?
Describe the roles and the basic relationship among the major parties in a
corporation—stockholders, board of directors, and president. How are
corporate owners compensated?
Briefly name and describe some organizational forms other than corporations that provide owners with limited liability.
Why is the study of managerial finance important regardless of the specific
area of responsibility one has within the business firm? 10 PART 1 LG2 Introduction to Managerial Finance LG3 1.2 The Managerial Finance Function
People in all areas of responsibility within the firm must interact with finance
personnel and procedures to get their jobs done. For financial personnel to
make useful forecasts and decisions, they must be willing and able to talk to
individuals in other areas of the firm. The managerial finance function can be
broadly described by considering its role within the organization, its relationship to economics and accounting, and the primary activities of the financial
The firm’s chief financial manager, who is responsible for the
firm’s financial activities, such
as financial planning and fund
raising, making capital expenditure decisions, and managing
cash, credit, the pension fund,
and foreign exchange.
The firm’s chief accountant, who
is responsible for the firm’s
accounting activities, such as
corporate accounting, tax
management, financial accounting, and cost accounting. Hint A controller is
sometimes referred to as a
comptroller. Not-for-profit and
frequently use the title of
foreign exchange manager
The manager responsible for
monitoring and managing the
firm’s exposure to loss from
currency fluctuations. Organization of the Finance Function
The size and importance of the managerial finance function depend on the size of
the firm. In small firms, the finance function is generally performed by the
accounting department. As a firm grows, the finance fu...
View Full Document
- Fall '13
- Finance, Corporation, Types of business entity