The role of financial management

Assignment Help Finance Basics

Reference no: EM133062283

THE GOALS AND FUNCTIONS OF FINANCIAL MANAGEMENT

DISCUSSION

I. The role of financial management has substantially increased in importance.

II. Finance as a field of study has evolved over time in response to changing business management needs.

III. Functions of Financial Management. A financial manager is responsible for financing an efficient level and composition of assets by obtaining financing through the most appropriate means.

IV. Corporate Governance.

V. Goals of Financial Management.

VI. The Role of Financial Markets. Wealth maximization depends on the perception and expectations of the market. Through daily price changes in the common stock of each publicly traded company, the market provides managers with a performance report card.

Review Of Accounting

Discussion on below
I: Financial Statements
II: Depreciation and Funds Flow
III. Another important concept is that of free cash flow.
IV. Income Tax Considerations

Financial Analysis

Discussion on below
I. Ratio analysis
II. Impact of Inflation and Disinflation on Financial Analysis
III. Other Elements of Distortion in Reported Income

Financial Forecasting
Discussion on below
I. Need for Financial Planning
II. The most comprehensive means for doing financial planning is through the development of pro forma financial statements; namely the pro forma income statement, the cash budget, and the pro forma balance sheet.
III. Percent-of-Sales Method: Shortcut, less exact, alternative for determining financial needs

Operating And Financial Leverage
Discussion on below
I. Leverage in a Business: The use of fixed charge obligations with the intent of magnifying the potential return to the firm.
II. Operating Leverage
III. Financial Leverage: A measure of the amount of debt used in the capital structure of the firm.
IV. Combining Operating and Financial Leverage

Reference no: EM133062283

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