Corporate stakeholders
Financial Manager
• Financial managers try to answer some or all of these questions • The top financial manager within a firm is usually the Chief Financial Officer (CFO)
– Treasurer – oversees cash management, credit management, capital expenditures, and financial planning – Controller – oversees taxes, cost accounting, financial accounting and data processing
Chapter 1 Introduction to Corporate Finance
McGraw-Hill/Irwin
Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.
/rwj Student Edition • Course-wide Content Videos Excel Master Financial Markets Update CFA Sample Questions Appendices • Quizzes Chapter Quiz 提交每道习题选项后可看答案 More Resources Learning Objectives Excel Templates Web Exercises *Narrated Lecture Slides *iPod Content
Treasurer
Controller
Cash Manager
Capital Expenditures
Credit Manager Fi Manager
Financial Accounting
Cost Accounting Data Processing
Forms of Business Organization
• Working capital management
– How do we manage the day-to-day finances of the firm?
1-6
The financial management function (ACCA)
财务管理的基本涵义
财务的涵义
• 客观地存在于企业生产经营活动中的与资金运 动或现金流动相关的事务. • 与现金流动相关的各项活动（财务活动）---筹 资、投资、使用、收回、分配等
1-5
Financial Management Decisions
• Capital budgeting
– What long-term investments or projects should the business take on?
• Capital structure
– How should we pay for our assets? – Should we use debt or equity?
• Advantages
– Limited liability – Unlimited life – Separation of ownership and management – Transfer of ownership is easy – Easier to raise capital
• Disadvantages
Key Concepts and Skills
• Know the basic types of financial management decisions and the role of the financial manager • Know the financial implications of the different forms of business organization • Know the goal of financial management • Understand the conflicts of interest that can arise between owners and managers • Understand the various types of financial markets
• Advantages
– Two or more owners – More capital available – Relatively easy to start – Income taxed once as personal income
• Disadvantages
– Unlimited liability
1-13
Sole Proprietorship
• Advantages
– Easiest to start – Least regulated – Single owner keeps all the profits – Taxed once as personal income
• Disadvantages
– Separation of ownership and management – Double taxation (income taxed at the corporate rate and then dividends taxed at the personal rate)
1-16
A Comparison
Taxation Reinvestment and dividend payout Liability
Double Broad latitude
Limited liability
Continuity
Perpetual life
《中华人民共和国个人独资企业法》自2000年1 月1日起施行 第三十一条 个人独资企业财产不足以清偿债务 的，投资人应当以其个人的其他财产予以清偿。 /view/277498.html
• Three major forms in the United States
– Sole Proprietorship – Partnership
• General • Limited
– Corporation
• C-Corp • S-Corp • Limited Liability Company
Goal of Financial Management
• What should be the goal of a corporation?
– – – – Maximize profit? Minimize costs? Maximize market share? Maximize the current value of the company’s stock? – Maximize shareholder wealth?
财务管理：根据财经法规，按照财务管理原
则，组织财务活动，处理财务关系的一项经 济管理工作。
The Firm and the Financial Markets
Firm
Invests in assets (B) Current assets Fixed assets Firm issues securities (A) Retained cash flows (F) Short-term debt Cash flow from firm (C) Dividends and debt payments (E) Taxes (D) Long-term debt Equity shares
• General partnership • Limited partnership
– Partnership dissolves when one partner dies or wishes to sell – Difficult to transfer ownership
1-15
Corporation
1-4
Corporate Finance
• Some important questions that are answered using finance:
– What long-term investments should the firm take on? – Where will we get the long-term financing to pay for the investment? – How will we manage the everyday financial activities of the firm?
1-11
Hypothetical Organization Chart
Board of Directors Chairman of the Board and Chief Executive Officer (CEO) President and Chief Operating Officer (COO) Vice President and Chief Financial Officer (CFO)
合伙企业法：修订后的《中华人民共和国合伙企业法》公布，自
2007年6月1日起施行 。
/view/467333.htm 公司法：《中华人民共和国公司法》1993年12月29日第八届 全国人民代表大会常务委员会第五次会议通过 ，2005年 10月27日修订后的公司法，自2006年1月1日起施行 。 /view/33348.htm
Financial markets
Ultimately, the firm must be a cash generating activity.