AFM131 Lecture Notes - Lecture 10: Unsecured Debt, Revolving Credit, Cash Flow

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

Document Summary

Finance is all about managing the funds of a business (interpretaion of inancial data versus accouning - preparing accouning data) Obtaining of funds for long-lived assets (see figure 17. 1 on page 520) Three most common ways for irms to fail inancially. Poor control over cash lows - matching cash inlows to cash ouflows. Inadequate expense control - expenses too high in relaion to revenues. Other concerns to inancial managers: taxes and their minimizaion, internal audit (review) of the preparing of inancial statements and safeguarding of cash. The general public is only aware of a very small percentage of the actual thet of cash which invariably is done by employees. To minimize thet: keep litle cash on hand, separaion of duies relaive to the receipt and the payment of cash (segregaion of duies), and preparing bank reconciliaions. Short term forecast of up to one year of cash inlows and ouflows from the day-to-day operaions.