BUS 320 Lecture Notes - Lecture 1: Limited Liability Partnership, Sole Proprietorship, Dividend Policy

• School: NCSU
• Department: Business Management
• Course: BUS 320
• Professor: Bartley R Danielsen

Document Summary

Chapter 1 - the goals and activities of financial management. Economics provides broad pictures of economic environments for decision making. Finance links economic theory with accounting numbers. 1900s finance emerges as separate field from economics. 1930s financial practices revolve around such topics as. Financial capital (money) used to purchase real capital (long-term plant and equipment) Financial management concerned with managing entity"s money. Allocate funds to current and fixed assets. Develop appropriate dividend policy within context of firm"s objectives. Day-to-day credit management, inventory control and receipt and disbursement of funds. Risk-return trade-off determined to maximize the market value. Influences operational side (capital vs. labor or product a vs. Influences financial mix (stock vs. bonds vs. retained earnings) Profits and losses taxed as though they belong to individual owner. Similar to sole proprietorship except with two or more owners. One or more partners designated general partners and have unlimited liability for debts of firm.