财务管理英文课件An-Overview-of-Financial-Management

1、CHAPTER 1An Overview of Financial ManagementCareer OpportunitiesIssues of the New MillenniumForms of BusinessesGoals of the CorporationAgency RelationshipsCHAPTER 1An Overview of FinanCareer Opportunities in FinanceMoney and capital marketsInvestmentsFinancial managementCareer Opportunities in Finan

2、cResponsibility of the Financial StaffMaximize stock value by:Forecasting and planningInvestment and financing decisionsCoordination and controlTransactions in the financial marketsManaging riskResponsibility of the FinanciaRole of Finance in a Typical Business OrganizationBoard of DirectorsPresiden

3、tVP: SalesVP: FinanceVP: OperationsTreasurerControllerCredit ManagerInventory ManagerCapital Budgeting DirectorCost AccountingFinancial AccountingTax DepartmentRole of Finance in a Typical BFinancial Management Issues of the New MillenniumThe effect of changing technologyThe globalization of busines

4、sFinancial Management Issues ofPercentage of Revenue and Net Income from Overseas Operations for 10 Well-Known Corporations, 2001Company% of Revenue from overseas% of Net Income from overseasCoca-Cola60.835.9Exxon Mobil69.460.2General Electric32.625.2General Motors26.160.6IBM57.948.4JP Morgan Chase

5、& Co.35.551.7McDonalds63.161.7Merck18.358.13M52.947.0Sears, Roebuck10.57.8Percentage of Revenue and Net Alternative Forms of Business OrganizationSole proprietorshipPartnershipCorporationAlternative Forms of Business Sole proprietorships & PartnershipsAdvantagesEase of formationSubject to few regula

6、tionsNo corporate income taxesDisadvantagesDifficult to raise capitalUnlimited liabilityLimited lifeSole proprietorships & PartnerCorporationAdvantagesUnlimited lifeEasy transfer of ownershipLimited liabilityEase of raising capitalDisadvantagesDouble taxationCost of set-up and report filingCorporati

7、onAdvantagesFinancial Goals of the CorporationThe primary financial goal is shareholder wealth maximization, which translates to maximizing stock price.Do firms have any responsibilities to society at large?Is stock price maximization good or bad for society?Should firms behave ethically?Financial G

8、oals of the CorporaIs stock price maximization the same as profit maximization?No, despite a generally high correlation amongst stock price, EPS, and cash flow.Current stock price relies upon current earnings, as well as future earnings and cash flow.Some actions may cause an increase in earnings, y

9、et cause the stock price to decrease (and vice versa).Is stock price maximization thAgency relationshipsAn agency relationship exists whenever a principal hires an agent to act on their behalf.Within a corporation, agency relationships exist between:Shareholders and managersShareholders and creditor

10、sAgency relationshipsAn agency Shareholders versus ManagersManagers are naturally inclined to act in their own best interests.But the following factors affect managerial behavior:Managerial compensation plansDirect intervention by shareholdersThe threat of firingThe threat of takeoverShareholders ve

11、rsus ManagersMaShareholders versus CreditorsShareholders (through managers) could take actions to maximize stock price that are detrimental to creditors.In the long run, such actions will raise the cost of debt and ultimately lower stock price.Shareholders versus CreditorsSFactors that affect stock

12、priceProjected cash flows to shareholdersTiming of the cash flow streamRiskiness of the cash flowsFactors that affect stock pricBasic Valuation ModelTo estimate an assets value, one estimates the cash flow for each period t (CFt), the life of the asset (n), and the appropriate discount rate (k)Throughout the course, we discuss how to estimate the inputs and how financial management is used to improve them and thus maximize a firms value.Basic Valuation ModelTo estimaFactors that Affect the Level and Riskiness of C