Principles of managerial finance: chapter 1 summary
18 views 1 purchase
Course
Principles of Managerial Finance
Institution
FCES
Book
Principles of Managerial Finance: Brief, Global Edition
This is a study summary for chapter 1 in the Principles of Managerial Finance course Book. It covers all the topics and subjects in chapter 1, briefly and with examples from the book.
This Summary is well designed for reading and studying on different devices.
Principles of managerial finance: chapter 10 summary
Principles of managerial finance: chapter 8 summary
Principles of managerial finance: chapter 3 summary
All for this textbook (5)
Written for
FCES
Principles of Managerial Finance
All documents for this subject (5)
Seller
Follow
Citizenia
Content preview
STUDY
SUM
Principals of Managerial
Finance
CHAPTER 1
THE ROLE OF FINANCIAL MANAGEMENT
Gitman, Lawrence J, Zutter, Chad J
,Chapter 1
Principles of Managerial Finance
Chapter 1: The Role of Financial Management
1.1 Finance and Business 1.3 Managerial Finance Function
➢ What Is Finance? ➢ Organization of the Finance
➢ Career Opportunities in Finance. Function.
➢ Legal Forms of Business ➢ Relationship to Economics.
Organization. ➢ Relationship to Accounting.
➢ Why Study Managerial Finance? ➢ Primary Activities of the Financial
Manager.
1.2 Goal of the Firm
1.4 Governance and Agency
➢ Maximize Shareholder Wealth.
➢ Corporate Governance.
➢ Maximize Profit?
➢ The Agency Issue.
➢ What about Stakeholders?
➢ The Role of Business Ethics.
1.1 Finance and Business
What Is Finance?
• Finance can be defined as the science and art of managing money.
• At the personal level, finance is concerned with individuals’ decisions about
how much of their earnings they spend, how much they save, and how they
invest their savings.
• In a business context, finance involves the same types of decisions: how firms
raise money from investors, how firms invest money to earn a profit, and how
1
, Chapter 1
they decide whether to reinvest profits in the business or distribute them back
to investors.
Career Opportunities in Finance
• Careers in finance typically fall into one of two broad categories: (1) financial
services and (2) managerial finance.
• Financial services are the area of finance concerned with the design and
delivery of advice and financial products to individuals, businesses, and
governments. It involves a variety of interesting career opportunities within
the areas of banking, personal financial planning, investments, real-estate, and
insurance.
• Managerial finance is concerned with the duties of the financial manager
working in a business. Financial managers administer the financial affairs of all
types of businesses: private and public, large & small, profit seeking and not
for profit.
• In recent years, some factors have increased the importance and complexity
of the financial manager’s duties. These factors include the recent global fiscal
crisis and later responses by regulators, increased competition, and
technological change.
Legal Forms of Business Organization (table 1.1 is important, p.53)
• One of the most important decisions all businesses confront is how to choose
a legal form of organization. This decision has important financial implications
because how a business is organized legally influences the risks that the firm’s
owners must bear, how the firm can raise money, and how the firm’s profits
will be taxed.
• The three most common legal forms of business organization are the sole
proprietorship, the partnership, and the corporation.
2
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller Citizenia. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $2.99. You're not tied to anything after your purchase.
