BU121 Study Guide - Comprehensive Final Guide: Operating Cash Flow, Cash Flow, Enterprise Risk Management
Document Summary
Financial management is the art and science of managing a company"s money so that it can meets its goals. Financial managers track how money is flowing into and out of the company. Closely related to accounting and focus on cash flows. Financial planning: preparing a plan which projects revenues, expenditures, and financing needs. Investment (spending money): investing company funds in projects and securities that provide high returns in relation to their risks. Financing (raising money): obtaining funds and achieving the best balance between debt and equity. Main goal is to maximize the value of the company to its owners (consider short and long term consequences of company"s actions) Risk-return trade-off: the higher the risk (potential loss), the greater the returned reward (opportunity for profit) Financial plan guides the company to its business goals and the maximization of its value. Projections of future development in the company.
