AFM131 Chapter Notes - Chapter 17: Cash Flow, Financial Plan, Revolving Credit
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AFM131 Full Course Notes
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Lo1: explain the role and responsibilities of financial managers. Finance: the function in a business that acquires funds for the firm and manages them within the firm. Finance activities include preparing budgets; completing cash flow analysis; and planning for the expenditure of funds on assets such as plant, equipment, and machinery. Financial management: the jo(cid:271) of (cid:373)a(cid:374)agi(cid:374)g a fir(cid:373)"s resour(cid:272)es to (cid:373)eet its goals a(cid:374)d o(cid:271)jectives. Without a carefully calculated financial plan and sound financial management, a firm has little chance for survival, regardless of its products or marketing effectiveness. Financial manager: managers who examine the financial data prepared by accountants and recommend strategies for improving the financial performance of the firm. Three of the most common reasons a firm fails financially are: under capitalization (insufficient funds to run a business, poor control over cash flow. More control over business and financial decisions. Less control over business and financial decisions since stakeholder interests needs to be considered.