BU121 Study Guide - Final Guide: Investment, Enterprise Risk Management, Income Statement
Document Summary
Financial management: the art and science of managing a firms money so that it can meet its goals. Closely related to accounting: accountants collect and present financial data. Financial managers use the statements and info prepared by the accountants to make financial decisions. Financial managers plan and monitor firms cash flows to ensure cash is available when needed. Financial planning: prepare the financial plan, which projects revenues, expenditures, and financing needs over a given period. Investment (spend money): investing in the firms funds in projects and securities that provide high returns in relation to their risks. Financing (raising money): obtaining funding for the firms operations/investments and seeking the best balance between debt(borrowed funds) and equity (funds raised through the sale of ownership) Goal of financial manager: maximize the value of the firm to its owners. Forecasting: short term forecasts (operating plans): project revenues, cost of goods sold, and operating expenses over a one year period.
