BU121 Chapter Notes - Chapter 5: Time Deposit, United States Treasury Security
Document Summary
Financial management: the a(cid:396)t a(cid:374)d scie(cid:374)ce of (cid:373)a(cid:374)agi(cid:374)g a co(cid:373)pa(cid:374)(cid:455)"s (cid:373)o(cid:374)e(cid:455) so that it ca(cid:374) (cid:373)eet its goals. Cash flows: the inflows and outflows of cash for a company, the focus of the financial managers. The key activities of financial managers are: financial planning. Projections of the company for a period. I(cid:374)(cid:448)esti(cid:374)g the co(cid:373)pa(cid:374)(cid:455)"s fu(cid:374)ds p(cid:396)ope(cid:396)l(cid:455) a(cid:374)d st(cid:396)ategicall(cid:455: financing. Obtaining funding to fully operate the company. Risk: the potential loss or the chance that an investment will not achieve the expect level of return. Risk-return trade-off: a basic principle in finance that holds that the higher the risk, the greater the return required. Short-term forecasting: projections of revenues, costs of goods, and operating expenses over 1 year. Long-term forecasting: p(cid:396)ojectio(cid:374)s of a co(cid:373)pa(cid:374)(cid:455)"s acti(cid:448)ities a(cid:374)d the fu(cid:374)di(cid:374)g fo(cid:396) those acti(cid:448)ities o(cid:448)e(cid:396) a period that is longer than a year, typically 2-10 years.
