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Canada (161,540)
RSM100Y1 (431)
Chapter 20

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Department
Rotman Commerce
Course
RSM100Y1
Professor
Stojanovic Dragan
Semester
Winter

Description
CHAPTER 20 FINANCIAL DECISIONS AND RISK MANAGEMENTTHE ROLE OF THE FINANCIAL MANAGERProduction managersplanning and controlling the output of goods and servicesMarketing managersplan and control the development and marketing of productsFinancial managersplan and control the acquisition and dispersal of the firms financial assetsIn other words they are responsible for planning and overseeing the financial resources of a firmFinance or corporate finance typically involves four responsibilitiesDetermining a firms longterm investmentsObtaining funds to pay for those investmentsConducting the firms everyday financial activitiesHelping to manage the risks that the firm takes Objectives of the Financial ManagerCollect funds pay debts establish trade credit obtain loans control cash balances and plan for future financial needsBut overall objective is to increase a firms valueand thus stockholders wealthMake decisions for improving the firms financial status Responsibilities of the Financial ManagerResponsibility of the financial manager to increase a firms wealth falls into three categories cash flow management financial control and financial planningCash Flow Management Is managing the pattern in which cash flows in to the firm in the form of revenues and out of the firm in the form of debt paymentsFinancial Control Is the process of checking actual performance against plans to ensure that the desired financial status is achievedFinancial Planning Describes a firms strategies for reaching some future financial position includes projections for sources and uses of funds WHY DO BUSINESSES NEED FUNDS ShortTerm Operating ExpendituresFirms make them regularly in their everyday business activitiesTo handle these expenditures financial managers must pay attention to accounts payable and receivable inventories and working capitalCredit Policy rules governing a firms extension of credit to customers also sets payment terms
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