1-0 CHAPTER 1 An Overview of Financial Management Role of financial management Career opportunities Forms of business organization Goals of the corporation Issues of the new millenium ■ Agency relationships Copy right C 2002 by Harcourt, Inc. All rights reserved
1 - 0 Copyright © 2002 by Harcourt, Inc. All rights reserved. CHAPTER 1 An Overview of Financial Management ◼Role of financial management ◼Career opportunities ◼Forms of business organization ◼Goals of the corporation ◼Issues of the new millenium ◼Agency relationships
What three questions does financial management seek to answer? What causes a company to have a particular stock value? How can managers make choices that add value to their companies? How can managers ensure that their companies don't run out of cash while executing their plans? Copy right C 2002 by Harcourt, Inc. All rights reserved
1 - 1 Copyright © 2002 by Harcourt, Inc. All rights reserved. ◼What causes a company to have a particular stock value? ◼How can managers make choices that add value to their companies? ◼How can managers ensure that their companies don’t run out of cash while executing their plans? What three questions does financial management seek to answer?
1-2 Career Opportunities in Finance Institutions and capital markets ■ Investments ■ Financial management Copy right C 2002 by Harcourt, Inc. All rights reserved
1 - 2 Copyright © 2002 by Harcourt, Inc. All rights reserved. ◼Institutions and capital markets ◼Investments ◼Financial management Career Opportunities in Finance
1-3 Alternative Forms of Business Organization ■ Sole proprietorship ■ Partnership ■ Corporation Copy right C 2002 by Harcourt, Inc. All rights reserved
1 - 3 Copyright © 2002 by Harcourt, Inc. All rights reserved. ◼Sole proprietorship ◼Partnership ◼Corporation Alternative Forms of Business Organization
1-4 Sole Proprietorship ■ Advantages: ● Ease of formation O Subject to few regulations O No corporate income taxes ■ Disadvantages: ● Limited life ● Unlimited liability DIfficult to raise capital Copy right C 2002 by Harcourt, Inc. All rights reserved
1 - 4 Copyright © 2002 by Harcourt, Inc. All rights reserved. ◼Advantages: ⚫Ease of formation ⚫Subject to few regulations ⚫No corporate income taxes ◼Disadvantages: ⚫Limited life ⚫Unlimited liability ⚫Difficult to raise capital Sole Proprietorship