Management and Organizational Studies 3370A/B Lecture Notes - Corporate Finance, Balance Sheet, Takers

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 3370A/B
• Professor: Maria Ferraro

Document Summary

Finance: study of how/under what terms saving money= allocated, (may recognize similarity of finance and economics-studies how scarce resource are allocated in economy) Management of an entity"s balance sheet: distinct from economics- finance not just about how resources allocated, but under what terms/through what channels. Financial securities: whenever funds transferred, financial contract comes into existence. Balance sheet: snapshot of what owned, (assets) and owed, (liabilities) at particular time. Net worth/equity: difference between value of what"s owned and what"s owed. 3 major domestic groups in economy- individuals/households, businesses, government. Balance sheet shows all assets according to 6 major classifications. Personal assets: value of houses, land houses are on, major appliances in houses, cars. Consumer durables: appliances/cars because they last many years. Major assets for businesses= office towers, factories, mines etc, (non- residential structures) Asset acquisitions/capital expenditure decisions- how firms arrive at decision to build new factory, increase level on inventory holdings, buying another firm etc .