AFM131 Chapter Notes - Chapter 17: Retained Earnings, Financial Institution, Commercial Bank

• School: University of Waterloo
• Department: Accounting & Financial Management
• Course: AFM131
• Professor: David H A

Document Summary

Finance the function in a business that acquires funds for the firm and manages them within the firm: prepare budgets, complete cash flow analysis, plan for expenditure of funds on assets such as ppe. Financial management the jo(cid:271) of (cid:373)a(cid:374)agi(cid:374)g a fir(cid:373)"s resour(cid:272)es to (cid:373)eet its goals a(cid:374)d o(cid:271)je(cid:272)ti(cid:448)es: without it, firm has little chance of survival. Financial managers managers who examine the financial data prepared by accountants and recommend strategies for improving the financial performance of the firm: obtain funds, effectively control the use of those funds. Comptroller chief accounting officer a(cid:272)(cid:272)ou(cid:374)ti(cid:374)g/fi(cid:374)a(cid:374)(cid:272)e go together a(cid:374)d ge(cid:374)erall(cid:455) u(cid:374)der cfo"s (cid:272)o(cid:374)trol. The value of understanding finance 3 of the most common reasons a firm fails financially: undercapitalization (insufficient funds to run a business, poor control over cash flow. Financial managers are respo(cid:374)si(cid:271)le for pa(cid:455)i(cid:374)g a (cid:272)o(cid:373)pa(cid:374)(cid:455)"s (cid:271)ills at the right ti(cid:373)e & (cid:272)olle(cid:272)ti(cid:374)g o(cid:448)erdue pa(cid:455)(cid:373)e(cid:374)ts. Buy merchandise on credit (accounts payable) & collect payments (accounts receivable) are 2 main components.