MGMT 1 Chapter Notes - Chapter 18: Cash Flow, Unsecured Debt, Accounts Receivable
7 Dec 2016
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Finance: the function in a business that acquires funds for the firm and manages them within the firm. Financial management: the job of managing a firm"s resources to meet its goals and objectives. Financial managers: managers who examine financial data prepared by accountants and recommend strategies for improving the financial performance of the firm. Most common reasons a firm fails financially. Undercapitalization insufficient funds to start the business. Forecasting the firm"s short-term and long-term financial needs. Short-term forecast predicts revenues, costs, and expenses for a period of one year or less. Long-term forecast predicts revenues, costs and expenses for a period longer than 1 year, sometimes as long as 5 or 10 years. Budget: financial plan that sets forth management"s expectations for revenues and, on the basis of those expectations, allocates the use of specific resources throughout the firm. Establishing financial controls to see whether the company is achieving its goals.
