AFM131 Chapter Notes - Chapter 17: Cash Flow, Promissory Note, Inventory Turnover

• School: University of Waterloo
• Department: Accounting & Financial Management
• Course: AFM131
• Professor: Robert Sproule

Document Summary

Finance: function in a business that acquires funds for the firm and manages them within the firm: activities include: Important for both for profit and non-profit businesses, large and small. Financial management: job of managing a firm"s resources to meet its goals and objectives. Financial managers: examine the financial data prepared by accountants and recommend strategies for improving the financial performance of the firm: must also understand basic accounting principles. Three most common ways for firms to fail financially: undercapitalization - insufficient funds to start, poor control over cash flows - matching cash inflows to cash outflows. Inadequate expense control - expenses too high in relation to revenues. Other concerns to financial managers: taxes and their minimization, safeguarding of company cash. Internal audit of the preparing of financial statements. Analyzing short-term and long-term money flows to and from a firm. Cash flow forecast: forecast that predicts the cash inflows and outflows in future periods, usually months or quarters.