Forms of business organization

Corporation

Private or public

Shareholder

Wealth maximization – measurement?

Factors that influence market price

Controllable by Management
• profitability
• having a good liquidity and reasonable leverage position
• dividends
• competent management which affects the company’s operating efficiency
• coming up with corporate plans that improve the business prospects of the company

Uncontrollable External Factors

• macroeconomic conditions
• political stability
• prospects of the industry where the company operates
• general market sentiment
• flow of foreign funds invested in the Philippine stock market

Role of financial management

Profit maximization

Functions of a Financial Manager

• Identify the four functions of a VP for finance (CFO) as follows:
- Financing
- Investing
- Operating
- Dividend Policies