BIZ FINANCE QUIZ 1

• Finance can be determined as the science art of managing money (Gituman and Zutter, 2012)
• Personal Level - concerne with individuals decisions about how much of their earning they save, spend, or invest.
• Business Context - involves the same types of how finance raise money from investors, how they decrease whether to reinvest profits.
• Finance - process that includes raising money or resources and allocating them effectively and efficiently to achieve goals.
• Financial Management - study of investment, and study of institutions and markets.
• Investors - buy stocks because they want something in return.
• Financial Management deals with decisions that are supposed to maximize the value of shareholders' wealth.
• Financial Management- decision making process that include planning, analysis, utilization, and acquisition of funds.
• Risk and return - part of managing biz a thorough plan and analysis should be done to avoid or reduce risks to have good return.
• Financial Management includes planning, organizing, controlling, and directing to acquire and utilize funds
• Internal (source of finance) - does not increase debts of biz like profit or savings
• External (source of finance) - provided by people or institutions outside
• Shareholders - elects the board of directors (BOD). Each share is equal to one voting right. They buy shares to earn a profit in a form of dividend
• Board of directors - highest position in a corporation. Some of their responsibilities and providing direction of the company setting policies on investment
• President - supervises the company's operations and ensures that the strategies are well executed and planned
• Vice President (Sales and Marketing) - formulate biz strategies and plans, directing, and coordinating rules, marketing environment, scanning or research that will allow company to increase sales.
• Vice President (Administration) - responsible for the coordination of the different departments
• Vice President (Production) - make sure that the production meets the demand, find ways to minimize producing competitive quality product, maximizes the utilization of production facilities
• Vice President (Finance) - make decision modeling planning and acquiring, utilization of funds
• Functions of finance manager

  1. Investing decisions
  2. Financing decisions
  3. Operating decisions
  4. Declaration of dividends
• Financing decions- deals with managing the assets of the firm
• Financing decions - making decions on how to finance the long term investments of the firm
• Operating decisions - deals w working capital management
• Declaration of dividends - refers to the determinations of dividends to be paid to shareholders.
• Dividends- portion of profit or payment made by corporation to its shareholders
• Company must have enough retained earnings to support dividend declaration
• The company must have enough cash
• Treasurer - responsible in managing the cash and credit financial planning and capital expenditures
• Controlling- handles the tax payments, financial accounting
• Role of financial manager- in striving to maximize owners, the manager make decisions involving planning, acquiring and utilizing funds involve of risk and return trade off (Cabrera, 2012).
• Financial manager's decision making involves the following; analysis and planning, acquisition of funds, and utilization of funds.