AFM131 Chapter Notes - Chapter 17: Trade Credit, Operating Budget, Cash Flow

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

Document Summary

1: undercapitalization, poor cash flow control, inadequate expense control. Finance: the function in a business that acquires funds for the firm and manages them within the firm. Financial management: 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. Financial managers: examine financial data prepared by accountants and recommend strategies for improving the financial performance of the firm. Financial planning includes: fore(cid:272)asti(cid:374)g a fir(cid:373)"s short-term and long-term financial needs, developing budgets to meet those needs, establishing financial control to see if company is achieving its goals. Difference b/t financial management for private company vs public company: Private: more control over business and financial decisions (full artistic freedom) Public: less control over business and financial decisions (must consider stakeholders) Short-term forecast: predicts revenues, costs, and expenses for a period of one year or less. Long-term forecast: predicts revenues, costs, and expenses for a period longer than one year.