INTRODUCTION

TO FINANCIAL
MANAGEMENT
An Overview of Financial Management
  Finance versus Economics and
Accounting
 Finance Within an Organization

What is
Finance?

 Corporate Finance, Capital Market, and

Investments
 Basic Knowledge needed by
accounting students:
JOBS IN  Finance
FINANCE  Marketing
 Management
 Human Resources
  Sole Proprietorship
 Partnership
FORMS OF
 Corporation
BUSINESS
ORGANIZATION
Assignment: Submit a summary of 3 key differences
of the forms of business organization. Use a table to
compare and contrast their significant features.
(Deadline: January 29)
  Intrinsic value
An estimate of a stock’s “true” value based on
accurate risk and return data. The intrinsic value cab
be estimated but not measured precisely.
 Market Price
INTRINSIC The stock value based on perceived but possible
incorrect information as seen by the marginal
VALUES, STOCK investor
PRICES, AND
 Marginal Investor
EXECUTIVE An investor whose views determine the actual stock
COMPENSATION price
 Equilibrium
The situation in which the actual market price equals
the intrinsic value, so investors are indifferent
between buying or selling a stock.
INTRINSIC
VALUES, STOCK
PRICES, AND
EXECUTIVE
COMPENSATION
 A company’s attitude and conduct
BUSINESS
toward its employees, customers,
ETHICS community, and stockholders
CONFLICTS
BETWEEN
MANAGERS,
STOCKHOLDERS,
AND BONDHOLDERS