Bus 1038 - Chapter 20

Front 1

4 responsibilities of financial managers in finance

Back 1

1) determine a firm’s long term investments 2) Obtain funds to pay for those investments 3) Conduct the firms everyday financial activities 4) Help manage the risks

Front 2

Cash flow management

Back 2

managing the patters of cash inflows (revenues) and outflows (debt payments)

Front 3

Financial Control

Back 3

1) Checking actual performance against strategic plans to ensure that desired goals are achieved

Front 4

Budget

Back 4

1) Actual Budget (2013 – Actual) 2) Budget 10 % higher – Optimistic 3) Budget 10 % lower – Pessimistic

Front 5

Short-Term (Operating) Expenses

Back 5

1) Accounts Payable 2) Accounts Receivable 3) Inventory 4) Inventory 5) Working Capital

Front 6

Long-Term Capital Expenditures

Back 6

fixed assets that have a long life and lasting value

Front 7

Short Term Funds

Back 7

Allow firms to cover operational expenses and implement short term plans: factoring accounts receivable

Front 8

Debt Financing

Back 8

Seeking long-term funds through internal financing

Front 9

Retained Earnings

Back 9

Financing by retaining profits in the firm and paying the bonds ( for high margin companies, oil companies and jewelry stores.

Front 10

The Risk-Return Relationship

Back 10

1) Investors have various risk return tolerances (80 % chance going up, 20 % going down) 2) give money to companies in order to receive future cash flows

Front 11

Liability Insurance

Back 11

Worker compensation coverage

Front 12

Life Insurance

Back 12

group life insurance