EEE 370 Chapter Notes - Chapter 8: Current Liability, Financial Statement, Income Statement
26 Feb 2019
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Chapter 8 reading notes: assessing a new venture"s financial strength and viability. Financial management deals with two activities: raising money and managing company"s finances in a way that achieves the highest rate of return. Four main financial objectives: profitability, liquidity, efficiency and stability. Profitability: the ability to earn a profit. Liquidity: a company"s ability to meet its short term financial obligations. Accounts receivable: money owed to a comapny by its customers. Efficiency: how productively a firm utilizes its assets relatives to its revenue and profits. Stability: the strength and vigor of the firm"s overall financial posture. Financial statement: a writen report that quantitatively describes a firm"s financial health. Forecasts: an estimate of a firm"s future income and expenses based on its past performance, its current circumstances, and its future plans. Budgets: itemized forecasts of a company"s income, expenses, and capital needs and are also an important tool for financial planning and control.
