Introduction to the

Financial Environment
An overview of the various factors influencing the financial
landscape, including economic conditions, regulations, and
market dynamics.

by PROFESOR DR SALAMIAH A. JAMAL

Forms of Business

Sole Proprieto rship Partnership Co rpo ratio n

A business structure owned and A business owned and operated by A legal entity separate fro m its
operated by a single individual, two or m o re individuals who owners , providing limited liability
with minimal legal formalities. share responsibilities and profits. and various tax benefits.
Sole Proprietorship
Advantages
• Ease of Formation
• Freedom in decision making
• D irect Profits
• Tax Benefits
• Confidentiality

Disadvantages
• Unlimited Liability
• Limited Skills and Expertise
• Limited Access to Capital
 Partnership

Advantages
• Complementary Skills and Expertise
• Shared Financial Burden
• Division of Labor
Disadvantages
• Tax Benefits • Potential for Conflict
• Shared Profits
• Joint Liability
• Dependency on Partners
Corporation
Advantages
• Separate Legal Entity
• Limited Liability
• Ease of Capital Formation
• Transferability of Ownership
• Tax Advantages

Disadvantages
• Double Taxation
• Complexity and Formality
• Cost of Formation and Operation
• Corporate Social Responsibility Obligations
Mergers and A cquisitions
1 Merger Pro cess
The stages involved in joining two or more companies, including due diligence and negotiations.
TUI Group & TUI Travel PLC

2 A cquisitio n Strategy
Methods of acquiring another company, such as asset purchase or stock acquisition.
TripAdvisor & Viator
Jo b s in Finance
Financial A nalyst
Analysing financial data, preparing
reports and forecasts to guide
investment decisions.
Investment Banker R isk Manager
Raising capital, offering advisory Identifying and mitigating potential
services, and facilitating mergers risks to ensure financial stability
and acquisitions. and compliance.
Business Ethics
1 Integrity 2 Transparency
Ensuring honesty and fairness in Openly disclosing information
all business practices and decision- and maintaining clear communication
making processes. with stakeholders.

3 Compliance
Adhering to legal and ethical standards while conducting business operations.
Agency Relationships in Finance
Principal-A gent Model
The relationship between an individual or entity (the principal) and its agent.

Fiduciary Duties
The legal obligations that an agent has to act in the best interests of the principal.
Financial Markets and Institutions
Stock Exchanges Trading platforms for buying and selling securities.

Commercial Banks Financial institutions that provide banking services to

businesses and individuals.

Insurance Companies Entities that offer protection against financial losses in

exchange for premium payments.
Financial Management

Capital Budgeting Treasury Management

Evaluating potential long-term Managing an organization's
investments and deciding financial resources,
which projects to undertake. including cash flow and liquidity.

R isk A ssessment
Financial Fo recasting Evaluating potential financial
Estimating future financial risks and developing strategies to
outcomes based on historical mitigate them.
data and market trends.
Thank you