BUS3062
Assignment 1, Week 1
1. Define the terms finance and financial management, and identify the major sub-areas of finance. Finance is the way in which money is used and handled; especially, the way in which large amounts of money are used and handled by governments and companies (Merriam-Webster, 2014). Financial Management is the planning, directing, monitoring, organizing, and controlling of the monetary resources of an organization (Businessdictionary, 2014). The major sub-areas of finance are: investments—involves methods and techniques for making decisions about what kinds of securities to own; financial management—deals with a firm’s decisions in acquiring and using the cash that is received from investors or from
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An advantage are corporate shareholders cannot lose more money than they originally paid for their share of stock. A disadvantage to being a corporation is that corporations are double-taxed. Federal and state government tax corporate income once at the corporate level, and then the shareholders pay taxes again at the personal level. Hybrid Organizations promotes the growth of small businesses. An advantage is that they offer single taxation and limited liability to all owners. A disadvantage is that the owners bear personal liability for the firm’s debt (Cornett, Adair, & Nofsinger, 2014). 3. Define the terms agency relationship and agency problem, and list the three approaches to minimize the conflict of interest resulting from the agency problem. Whenever one party hires someone else to work for him or her that is an agency relationship. An agency problem is when the manager that is hired by the firm to operate the firm spend company money to improve their own lifestyle instead of earning more profits for shareholders (Cornett, Adair, & Nofsinger, 2014). The first approach is to ignore it, of the amount of money involved is small enough relative to the firm’s cash flow. The second approach is to monitor the manager’s actions. The final approach is to make the manager an owner. Making the manager an equity stake in the firm. 4. "Why is ethical behavior so important in the field of finance" (Cornett, Adair, & Nofsinger,
Financial Management is an important aspect of how a business operates efficiently. The way that the finances are controlled can determine how successful the company is. The finances of a business allows for the growth of the company. The five practices of financial management: capital structure decision, investment appraisal techniques, dividend policy, working capital management and financial performance assessment are critical when assessing a company. The performance of a company plays a key role on how successful the company is on meeting goals. There are different strategies and tools that a company can implement and if they are used to effectively the company can meet their goals. If a company has good finances, a good
Advantages- Less liability for stakeholders. Ability to raise funds/capital in the form of stocks as needed.
The finance function and its relation to other decision-making areas in the firm; the study of theory and techniques in acquisition and allocation of financial resources from an internal management perspective.
List and describe the three career opportunities in the field of finance. Finance has three main career paths: financial management, financial markets and institutions, and investments. Financial management involves managing the finances of a business. Financial managers—people who manage a business firm's finances—perform a number of tasks. They analyze and forecast a firm's finances; assess risk, evaluate investment opportunities, decide when and where to find money sources and how much money to raise, and decide how much money to return to the firm's investors. Bankers, stockbrokers, and others who work in financial markets and institutions focus on the flow of money through financial institutions and the markets in which financial assets are exchanged. They track the impact of interest rates on the flow of that money. People who work in the field of investments locate, select, and manage income-producing assets. For instance, security analysts and mutual fund managers both operate in the investment field.
1.Operations managers are responsible for assessing consumer wants and needs and selling and promoting the organizations goods or services.TrueFalse 2.Often, the collective success or failure of companies operations functions will impact the ability of a nation to compete with other nations.TrueFalse 3. An example of a strategic operations management decision is the choice of where to locate.TrueFalse 4. An example of an operational operations management decision is inventory level management.TrueFalse 5. Global teams provide diversity while eliminating conflicts and miscommunication.TrueFalse 6. A House of Quality is achieved when no department in a single location has more than 15 rejects.TrueFalse 7. The term capacity refers to the
Well to me it depends on the mind-set of an individual, his/her innate abilities and capabilities. I myself broadly classify entrepreneurs into two types, The Inventors (those who with their discrete and genius intellect pioneer goods and services that never existed) and the Innovators (take existing idea and innovate it with their brilliance). It is the category that defines the set of skills, traits and characteristics suited to that entrepreneur. For example the first type of entrepreneurs i.e. Inventors are revolutionary blended with growth orientation. They want to revolutionize the market or industry and grow at some rate so that their product becomes a necessity e.g. Thomas Edison, While on the other hand
website of the New York Stock Exchange (NYSE.com) and providing a brief summary of each
* Finance is the study of how people and businesses evaluate investments and raise capital to fund them. Our interpretation of an investment is quite broad.
Another large car manufacture that is located in the United States is General Motors (GM). General Motors would benefit more in this competitive
E. record both income and expenses as soon as the amount for each can be ascertained.
Even though financial management "is a broader concept than accounting", the idea of financial management is more than just accounting for where money is spent, it is based on the analyzation of organization's economic
Financial Management is a critical aspect of any business in order to achieve a sustainable and efficient cash flow. It is essential in maintaining the link between a business’s future financial goals (profit maximization) and the resources that it has in order to achieve its objectives. Businesses demand certain common goals that increase a bussiness's all around achievement, Some of which involve; growth amongst assests, An increase in efficiency in all areas of the business whether it be management or not. And the ability to meet short term and long term debts. Finacial management undertakes the responsibility to implement and acheive these goals for the business using a range of strategies shaped to meet the needs of the business and
Agency relationships in a business organization exist between the principal, who are the owners or capital providers of the firm and the management, who form the agents. To avert conflict between the agents, the management should seek to fulfill the duties and responsibilities vested upon them by the principal. However, management actions may lead to agency costs, which may be excessive or unnecessary emanating from the agency conflict. The agency costs may entail excessive remunerations to self, neglect of duty, empire building by the management, pursuit of sales growth at the expense of shareholder wealth or profits, inadequate investment of corporate resources in potentially profitable ventures at the expense of the shareholders, assigning excessive perks to self, manipulation of dividend policy rather than wealth creation, and employee welfare objectives.
Agency relationship refers to a consensual relationship between two parties, where one person or entity authorizes the other to act on his, her or its behalf, and they exist as mutual agreements between individuals, small firms and large organizations. Managerial opportunism is when managers use employer information for personal gain, this creates a conflict of interest, with self-serving managers making decisions that benefit them rather than the company owners or shareholders. Corporate governance problem deals with