Chapter 1
The Role of Managerial Finance
3
CH (1) - The Role of Managerial Finance
Learning Goals
LG1 Define finance and the managerial finance function.
LG2 Describe the legal forms of business organization.
LG3 Describe the goal of the firm, and explain why maximizing the value of the firm...
chapter 1 the role of managerial finance 3 ch 1 the role of managerial finance learning goals lg1 define finance and the managerial finance function lg2
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ROLE OF
Corporate CORPORATE
Finance 1 FINANCE
Introduction to
Managerial Finance
CH (1) - The Role of
Managerial Finance
CH (2) - The Financial Market
Environment
,Corporate Finance 1
Chapter 1
The Role of Managerial Finance
, CH (1) - The Role of Managerial Finance
Learning Goals
LG1 Define finance and the managerial finance function.
LG2 Describe the legal forms of business organization.
LG3 Describe the goal of the firm, and explain why maximizing the value of the firm
appropriate goal for a business
LG4 Describe how the managerial finance function is related to economics and accounting.
LG5 Identify the primary activities of the financial manager.
LG6 Describe the nature of the principle-agent relationship between the owners and manage
corporation, and explain how various corporate governance mechanisms attempt to m
agency problems
, CH (1) - The Role of Managerial Finance
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 abou
much of their earnings they spend, how much they save, and how they invest
savings.
• In a business context, finance involves the same types of decisions: how firms
money from investors, how firms invest money to earn a profit, and how they d
whether to reinvest profits in the business or distribute them back to investors.
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