MGMT 1 Chapter 18: Ch. 18
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Finance: function in business that acquires funds for the firm and manages those funds within firm. Fi(cid:374)a(cid:374)(cid:272)ial (cid:373)a(cid:374)age(cid:373)e(cid:374)t: jo(cid:271) of (cid:373)a(cid:374)agi(cid:374)g fi(cid:396)(cid:373)"s (cid:396)esou(cid:396)(cid:272)es so it (cid:272)a(cid:374) (cid:373)eet its goals a(cid:374)d o(cid:271)je(cid:272)ti(cid:448)es. Financial managers: managers who examine financial data prepared by accountants and recommend strategies for improving financial performance of firm. Three steps: fo(cid:396)e(cid:272)asti(cid:374)g fi(cid:396)(cid:373)"s sho(cid:396)t-term and long-term financial needs, developing budgets to meet those needs. Establishing financial controls to see whether company is achieving its goals. Short-term forecast: forecast that predicts revenues, costs, and expenses for period of one year or less. Cash flow forecast: forecast that predicts the cask inflows and outflows in future periods. Long-term forecast: forecast that predicts revenues, costs and expenses for period longer than 1 year. Sometimes as far as 5 or 10 years into future. Budget: fi(cid:374)a(cid:374)(cid:272)ial pla(cid:374) that sets fo(cid:396)th (cid:373)a(cid:374)age(cid:373)e(cid:374)t"s e(cid:454)pe(cid:272)tatio(cid:374)s a(cid:374)d o(cid:374) the (cid:271)asis of those expectations, allocates the use of specific resources throughout the firm.
