COMM 320 Lecture Notes - Lecture 8: Cash Flow Statement, Financial Statement, Income Statement
5 Dec 2018
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Document Summary
Financial management deals with (1) raising money and (2) managing a company"s finances in a way that achieves the highest rate of return. In order to pursue an opportunity and turn an idea into a viable entrepreneurial firm you need starting cash. Money can come from external sources (investors or lenders) or is internally generated through earnings. Firms need to know their financial status at all times. A properly managed firm stays on top of the issues suggested by these questions through tools and techniques. Main objectives of any firms: profitability: the ability to earn a profit. Many start-ups are not profitable during their first 1-3 years while in the training period, but must become profitable in order to become successful: liquidity: is a company"s ability to meet its short-term financial obligations. Even when profitable, it is often a challenge to keep enough money in the bank to meet everyday obligations in a timely manner.
