Professional Documents
Culture Documents
BUDGETING
What is the indicator of the external goal of the firm? MARKET VALUE
What is the 1ST internal goal of the firm and its ACCOUNTING
indicator GENERATE FUNDS – STATEMENT OF
CASH FLOW
A ________ is responsible for evaluating and recommending proposed long-term *
credit manager
pension fund manager
capital expenditures manager
financial analyst
Finance is ________. *
If managers are not owners of their company, then they are ________. *
brokers
bondholders
agents
dealers
The goal of business ethics is to motivate business and market participants to adhere to both
the letter and the spirit of laws and regulations in all aspects of business and professional
practice. 2.Marginal cost-benefit analysis states that financial decisions should be made and
actions should be taken only when the added benefits exceed the added costs *
Which of the following is the best measure to ensure that management decisions are in the
best interest of the stockholders? *
tie management compensation to the performance of the company's common stock price
fire managers who are inefficient
remove management's perquisites
tie management compensation to the level of dividend per share
A ________ is responsible for the firm's accounting activities, such as corporate accounting,
tax management, financial accounting, and cost accounting. *
share price
net income
dividends
inventory turnover
Dividend payments change directly with changes in earnings per share. 2.To achieve the goal
of profit maximization for each alternative being considered, a financial manager would select
the one that is expected to result in the highest return. *
The responsibility for managing day-to-day operations and carrying out corporate policies
belongs to the ________. *
board of directors
members
chief executive officer
stockholders
production planning
auditing of financial statements
supply chain management
personal financial planning
1.A controller typically handles the accounting activities, such as tax management, data
processing, financial accounting, and cost accounting 2. In large companies, CEOs are legally
responsible for coordinating the assets and liabilities of the employees' pension fund. *
A treasurer is responsible for the firm's accounting activities, such as corporate accounting,
tax management, financial accounting, and cost accounting. 2.In a limited partnership, all
partners' liabilities are limited to their investment in the partnership. *
In planning and managing the requirements of a firm, the financial manager is concerned with
________. *
the acquisition of fixed assets, allowing someone else to plan the level of current assets
required, and the market value of the share
the mix and type of assets, but not the type of financing utilized
the mix and type of assets, the type of financing utilized, and analysis in order to monitor the
financial condition
the type of financing utilized, but not the mix and type of assets
1.A financial analyst is responsible for maintaining and controlling a firm's daily cash balances
2.Finance is concerned with the process institutions, markets, and instruments involved in the
transfer of money among and between individuals, businesses, and government. *
The agency problem may result from a manager's concerns about ________. *
repurchase of shares
earnings management
paying a high amount of dividends every year
using the call option
1.High net cash flow with fixed risk is generally associated with a higher share price. 2.When
considering a firm's financial decision alternative, financial managers should accept only those
actions that are expected to increase the firm's profitability *
A ________ is responsible for a firm's financial activities such as financial planning and fund
raising, making capital expenditure decisions, and managing cash, credit, the pension fund,
and foreign exchange. *
treasurer
pension fund manager
foreign exchange manager
controller
1.Financial managers administer the financial affairs of all types of businesses such as private
and public, large and small, and profit seeking and not for profit. 2.Financial managers
perform different tasks developing a financial plan or budget, extending credit to customers,
evaluating proposed large expenditures, and raising money to fund a firm's operations. *
1.The wealth of corporate owners is measured by the share price of the stock.. 2.Risk, the
magnitude and timing of cash flows are the key determinants of share price, which represent
the wealth of the owners in the firm. *
Which of the following is one of the positive benefits of an effective ethics program? *
1.An increase in a firm's risk will always result in a higher share price since the stockholder
must be compensated for the greater risk. 2.Stockholders expect to earn higher rates of
return on investments with lower risk and lower rates of return on investments with higher
risk.. *
Which of the following activities of a finance manager determines the types of assets the firm
holds? *
1.Managerial finance is concerned with design and delivery of advice and financial products
to individuals, businesses, and governments. 2.A sole proprietor has unlimited liability; his or
her total investment in the business, but not his or her personal assets, can be taken to satisfy
creditors. *
ESSAY
MAXIMUM OF 150 words
Because the output would normally be a decision, one model or tool would be preparing
financial statement analysis. Although the basis is the financial statement, the result will be
used in the future. With that, the decisions that have to make based on the prepared financial
statement analysis, would assessment in Profitability, Solvency, Activity, Liquidity, Market Value
(PSALM) (PSALM). So, the decision that will be facilitated by accounting with the use of financial
statement and that undergo financial statement analysis would actually be the PSALM.
In economics, the 5Ws is a method of analysis that consists of several stages that question the
fundamental characteristics of a situation. These simple questions provide factual elements
that, once gathered, allow for the rendering of an interest and situation or context. The answer
to the question "who" reveals who brings funds from economic units. The “what” question is
for resource allocation; it will provide information on which funds go to investment. The phrase
"where" refers to both domestic and international trade. The question of "when" refers to the
present and future, or the short-term and long-term investment of decision making. Finally,
“why” is concerned with decision making.
Discuss the primary and secondary disciplines in terms of information provided to finance
Accounting and economics are the primary disciplines. Accounting is a qualitative data set that
will be used for internal purposes. Economics is a type of qualitative information that can be
obtained from both internal and external sources. Marketing and management are secondary
disciplines. Marketing is made up of qualitative and quantitative data gathered from outside
sources. Management is a qualitative information source that includes both external and
internal sources.
We use ratios, vertical and horizontal analysis, and trends as tools in accounting. Financial
statements are used as input. The procedure/ process is the same as financial statement
analysis. Output represents our decision, which will be made following the financial statement
analysis. And for data verification, we can look for the storage, which is the financial statements
and financial reports.
Who are the economic entities and relate it to the area in finance as well as the decisions
made?
Firms, households, and governments are examples of economic entities. The entities can be
classified as private or public. In the private sector, it includes firms for which corporate
finance is the subject matter and households for which personal finance is the subject matter.
The public sector, on the other hand, will include the government and its subject matter will
be public finance. Because we must make decisions, economic units can be either surplus or
deficit. In most cases, the surplus unit will be households, whereas the firm may occasionally
be a surplus or deficit unit. While the government will be the primary deficit unit.
Companies, hospitals, municipalities, and federal agencies are examples of economic entities.
Finance is divided into three interconnected areas: (1) money and credit markets, which deal
with securities markets and financial institutions; (2) investments, which deal with decisions
made by both individual and institutional investors; and (3) financial management, which
deals with decisions made within the firm regarding the acquisition and use of funds.
Discuss the 5Ws in accounting
Because disciplines are interrelated, the financial statement is an accounting output in which
the indicators are PAS that is past oriented from the statement of operations, statement of
cash flow, and statement of financial position. The letter P is made up of three Ps: profitability,
performance, and productivity, which are the three main concepts of the Statement of
Comprehensive Income. The primary users of information will be able to identify if a company is
good and if the time is right to invest in that company with the help of Ps in PAS. The letter A is
made up of three A's: financing activity, investing activity, and operating activity, which are all
components of the Statement of Cash flow. The letter S is made up of three S’s: solvency,
stability, and sustainability, which are the three main concepts of Financial Position. PAS in
accounting is concerned with Financial Statements, which are the accounting output.
Financial Decision, Financial Market, Short vs Long Term, Firm/ Financial Manager/ CFO, and
Financial Valuation are the 5Ws of finance. Financial decisions must be made carefully in order
to make sound decisions about when, where, and how a business should acquire funds.
Financial markets exist primarily to bring people together so that money flows to where it is
most needed; in other words, savings are used to invest in productive assets. Short vs. long
term refers to the period of Return on Investment, and whether or not that period is
worthwhile. Firm/Financial Manager/CFO They make the decision and act as an agent for the
shareholders. Financial valuation is the process by which an analyst assigns a value to a
company by considering its management, the composition of its capital structure, the prospect
of future earnings, and the market value of its assets, among other factors.