MGMT 1 Chapter Notes - Chapter 18: Financial Statement, Trade Credit, Commercial Bank
Document Summary
2 major questions: (cid:392)what is finance? (cid:393) (cid:392)what do financial managers do? (cid:393) Finance: function in a business that acquires funds for the firm and manages them within the firm. Preparing budgets, cash flow analysis, planning expenditures of funds on assets. Financial management : job of managing firm"s resources to meet its goals & objectives. Financial managers : examine financial data prepared by accountants and recommend strategies for improving financial performance of firm. Only if they understand accounting information (vice versa) Both generally under control of chief financial officer (cfo) 2nd highest paid person in org. 2 key responsibilities: obtain funds & effectively control the use of those funds. 3 of most common reasons a firm fails financially: undercapitalization (insufficient funds to start business, poor control over cash flow, inadequate expense control. Financial managers: responsible for paying company bills at appropriate time, collecting overdue payments to make sure company does not lose too much money to bad debts.
