Describe the roles and the basic relationship among

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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 manager. treasurer 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. controller 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 governmental organizations frequently use the title of comptroller. 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...
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This document was uploaded on 01/19/2014.

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