Introduction to Financial Management

Recently,i am learning some useful things about financial management by reading 《Essentials of Corporate Finance》 writed by Ross/Westerfield/Jordan.Now i will share with you.

Chapte One : Introduction to Financial Management

• Traditionally,finance are grouped into four basic Areas:

　　1.corporate finance

　　2.investment

　　3.financial institutions

　　4.international finance

　　and here,we just only focus on corporate finance.

• Why study finance?

　　1.Marketing and finance:involving with budget,marketing research,the design of marketing and distribution channels,product pricing

　　2.Accounting and finance

　　3.Management and finance

　　4.you and finance:financial decision in daily life

　　Business finance and Financial management

• what is business finance?

　　1.long-term investment,line of business,buildings,machinery,equipment

　　2.the source of long-term finance to investment,other owners or borrow money

　　3.manage everyday financial activities

• financial management decision:

　　1.Capital budgeting:process of planning and managing long-term investment,identify investment opportunities,the value of cash flows > cost,evaluating the size,timing,and risk of future cash flows is the essence of the capital budgeting

　　2.Capital structure:the specific mixture of long-term debt and equity the firm uses to finance its operations,should borrow?the least expensive source of funds?how and where to raise the money?

　　3.working capital management:a firm‘s short-term assets,such as inventory and short-term liabilities,such as money owed to suppliers;ensure sufficient resources to day-to-day firm‘s activities,operations;receipt and disbursement of cash;how much cash and inventory should keep on hand?sell on credit to customers?how will we obtain any needed short-term financing?

　　Forms of business Organization

• sole proprietorship 独资:keep all profits,but unlimited liability for business debts;unable to exploit new opportunities because of insufficient capital;ownership is diffcult to transfer
• Partnership 合伙 :partner share in gains and losses; unlimited liability for debts;partnership agreement
• Corporation 公司 :the separation of ownership and management;stockholders have limited liability for corporate debts;The most they can lose is what they have invested.(These are advantages.) legal person,pay taxes(double taxation:corporate level and personal level)

　　Limited liability company (LLc):a hybrid of partnership and corporation,operate and taxed like partnership but retain limited liability for its owners

• joint stock company,public limited company,limited liability company

(waiting...)

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Introduction to Financial Management

原文：http://www.cnblogs.com/allenpengyu/p/3581438.html