These are Exam questions and solutions as well as those that were found in assignments, study guides and practice questions. When you work through these you will gain an excellent understanding of concepts, theories, techniques and methods which will allow you to answer exam questions. This will sa...
Shop U21, Stoneridge Centre, 1 Stoneridge Drive, Greenstone Park, Edenvale, Johannesburg, 1610
Postnet Suite #448, Private Bag x10010, Edenvale, 1610 • www.ebs.co.za • Company Registration 2012/018470/0
, 2
Table of Contents
Introduction..................................................................................................................................... 2
Business risk and financial risk............................................................................................... 6
Ratio analysis .................................................................................................................................. 9
Failure prediction (businesses in difficulty)................................................................ 23
Questions ....................................................................................................................................... 26
MAC3702
Topic 1
Nadia Janse van Rensburg
, 3
Introduction
Financial management
FINANCIAL MANAGEMENT
Objective: Maximising long term sustainable wealth
(Cost of financing < Return on investments)
FINANCING DECISIONS INVESTMENT
Objective: Obtaining funds with the minimum DECISIONS
effective cost Objective: Investing in
sustainable projects with
maximum long term
returns
Forms of equity Forms of loan Investment
finance finance/debt opportunities
-Issued share capital -Debentures -Capital assets
-Retained income -Mortgage bonds -Replacement of assets
-Preference shares -Long term loans -Mergers
(Convertible) -Instalment sale -Acquisitions
-Lease finance -Restructuring
-Preference shares (not
convertible)
Techniques: Techniques:
-Effective cost of finance -Time value of money
-Time value of money -Capital budgeting
-Valuation methods
Goal of an entity
1. Shareholders wealth maximisation
In the 1990’s business entities often cited their main goal as maximising
of shareholders wealth, and it became common for company boards to
focus on shareholder value, thereby maximising returns to shareholders.
MAC3702
Topic 1
Nadia Janse van Rensburg
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 EFT, 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 this summary from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller ivann. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy this summary for R110,00. You're not tied to anything after your purchase.
