MGM101H5 Lecture Notes - Unsecured Debt, Cash Flow, Revolving Credit
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MGM101H5 Full Course Notes
Verified Note
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Document Summary
Financial activities include preparing budgets, doing cash flow analysis, and planning for the expenditure of funds on assets. Accountant records data, financial managers analyze data. Accountants need to know finance and vice versa. In large corporations, cfo is in charge of both departments. Financial managers examine financial data and make recommendations to top executives on how to improve financial strength of firm. Most common ways for small businesses to fail are: undercapitalization, poor cash flow control, and poor expense control. Financial managers have to be aware of changes in financial regulations such as tax. Financial department is also responsible for internal auditing, which is a strategic approach to checking the work of accountants. Objective is to optimize firm"s profitability and make the best use of its money. This is done by analyzing past short-term and long-term money flows. Therefore, it is easier to financially manage a old firm, which has had records and experience, than a new firm.
