BU121 Study Guide - Final Guide: Professional Liability Insurance, Cash Flow, Asset Management

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16 Apr 2016

Document Summary

To make money, you need to spend money on items that are essential for operations (inventory, equipment) Financial management ensures that a company"s money is managed so that it can meet its goals (making strategic decisions) The main goal of a financial manager is to maximize the value of the company to its owners! Start with financial forecasts and estimated demand (sales) Financial planning enables the company to estimate the amount and timing of the financial resources it needs to meet its business goals. Short-term forecasts: operating plans that project future revenues, cogs, and operating expenses over one year period, form the basis for the cash budget. Long-term forecasts: strategic plans, cover periods from 2-10 years and takes a broader view of the company"s financial activities, management can assess what financial effects certain strategies will have. Collect money owed to company as quickly as possible (ar) Pay money owed to others as late as possible (ap)