Class Notes (836,562)
Canada (509,854)
MGTA02H3 (143)

Chapter 12 Study Guide

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Management (MGT)
Chris Bovaird

CHAPTER 12 Financial managers: Those managers are responsible for planning and overseeing the financial resources of the firm. Finance (corporate finance): The business function involving decisions about a firm’s long-term investments and obtaining the funds to pay for those investments. Cash flow management: Managing the pattern in which cash flows into the firm in the form of revenues and out of the firm in the form of debt payments. Financial control: The process of checking actual performance against plans to ensure that the desired financial status is achieved. Financial plan: A description of how a business will reach some financial position it seeks for the future; includes projections for sources and uses of funds. Credit policy: Rules governing a firm’s extension of credit to customers. Inventory: Materials and goods currently held by the company that will be sold within the year. Raw materials inventory: That portion of a firm’s inventory consisting of basic supplies used to manufacture products for sale. Work- in- process inventory: That portion of a firm’s inventory consisting of goods partway through the production process. Finished goods inventory: That portion of a firm’s inventory consisting of completed goods ready for sale. Trade credit: The granting of credit by a selling firm to a buying firm. Open- book credit: Form of trade credit in which sellers ship merchandise on faith that payment will be forthcoming. Promissory note: Form of trade- credit in which buyers sign promise-to-pay agreements before merchandise is shipped. Trade draft: Form of trade credit in which buyers must sign statements of payment terms attached to merchandise by sellers. Trade acceptance: Trade draft that
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