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SOLUTIONS MANUAL

FINANCIAL MANAGEMENT
PRINCIPLES AND APPLICATIONS
VOLUME I

2012 Edition

MA. ELENITA BALATBAT CABRERA


BBA, MBA, CPA, CMA

Table of Contents
Unit I
Chapter

Introduction to Financial Management


1

NATURE, PURPOSE AND SCOPE OF FINANCIAL


MANAGEMENT

1-1 - 1-2

RELATIONSHIP OF FINANCIAL OBJECTIVES TO


ORGANIZATIONAL STRATEGY AND OTHER
ORGANIZATIONAL OBJECTIVES

2-1 - 2-3

FUNCTIONS OF FINANCIAL MANAGEMENT

3-1 - 3-2

FORMS OF BUSINESS ORGANIZATION

4-1 - 4-2

Unit II
Chapter

The Framework of Financial Management


5

Unit III
Chapter

APPLICATIONS OF MICROECONOMICS THEORY AS A


BASIS FOR UNDERSTANDING THE KEY ECONOMIC
VARIABLES AFFECTING THE BUSINESS

5-1 - 5-5

APPLICATIONS OF MACROECONOMICS THEORY AS A


BASIS FOR UNDERSTANDING THE KEY ECONOMIC
VARIABLES AFFECTING THE BUSINESS

6-1 - 6-4

COMPETITION AND POLICIES TOWARDS MONOPOLIES


AND OLIGOPOLIES, PRIVATIZATION AND
DEREGULATION

7-1 - 7-6

Effects of the Economic Environment on


Business Strategy
8

UNDERSTANDING THE ROLE OF THE FINANCIAL


MARKETS AND INSTITUTIONS

8-1 - 8-5

INTERNATIONAL TRADE

9-1 - 9-2

10

THE TIME VALUE OF MONEY

10-1 - 10-5

Unit IV
Chapter

Unit V

Unit VI
Chapter

Evaluating Operating and Financial


Performance
11

UNDERSTANDING FINANCIAL STATEMENTS

11-1 11-16

12

ANALYSIS OF FINANCIAL STATEMENTS

12-1 12-22

13

CASH FLOW ANALYSIS

13-1 13-2

14

OPERATING AND FINANCIAL LEVERAGE

14-1 14-17

Financial Forecasting, Planning and Control


15

FINANCIAL FORECASTING FOR STRATEGIC GROWTH

15-1 15-11

16

FORECASTING SHORT-TERM (OPERATING) FINANCIAL


REQUIREMENTS

16-1 16-8

Working Capital Management


17

ADDRESSING THE WORKING CAPITAL POLICIES AND


MANAGEMENT OF SHORT-TERM ASSETS AND
LIABILITIES

17-1 17-6

18

CASH AND MARKETABLE SECURITIES MANAGEMENT

18-1 18-8

19

ACCOUNTS RECEIVABLE AND INVENTORY


MANAGEMENT

19-1 19-11

SHORT-TERM SOURCES FOR FINANCING CURRENT


ASSETS

20-1 20-11

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