RSM100Y1 Chapter Notes - Chapter 17: Financial Plan, Investment, Commercial Paper
Document Summary
Finance: business function of planning, obtaining, and managing the company"s funds to accomplish its objective as effectively and efficiently as possible. Financial managers: executives who develop and carry out their firm"s financial plan and decide on the most appropriate sources and uses of funds. Vice-president of financial planning: prepares financial forecasts and analyzes major investment decisions related to new products, new production facilities, and acquisitions. Treasurer: responsible for all of the company"s financing activities, including cash management, tax planning and preparation, and shareholder relations; also works on the sale of new security issues to investors. Controller: chief accounting manager; keeping the company"s books, preparing financial statements, and conducting internal audits. Risk-return trade-off: process of maximizing the wealth of the firm"s shareholders by striking the right balance between risk and return. The more money a firm borrows, the greater the risk to shareholders.
