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    Finma Prelim - 1

    Uploaded by

    anne grace escape
    Financial Management

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd

    Finma Prelim - 1

    Uploaded by

    anne grace escape
    13 views2 pages
    Financial Management

    Original Title

    FINMA PRELIM -1

    Copyright

    © © All Rights Reserved

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    PDF, TXT or read online from Scribd

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    Financial Management

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    13 views2 pages

    Finma Prelim - 1

    Uploaded by

    anne grace escape
    Financial Management

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 2

    FINMA

    ENUMERATION

    Goals of Financial Management


    1. Profit Maximization; maximization of the value of the firm
    2. Maximization of shareholders wealth
    3. Social responsibility and ethical behavior

    Function of Financial Management


    1. Forecasting and planning Elements/ documents to do
    2. Making crucial investment and financial decisions Financial Analysis
    3. Coordinating and controlling
    4. Trading in financial markets 1. Balance Sheet
    5. Risk Management 2. Income Statement

    Legal forms of business organization


    1. Sole Proprietorship
    2. Partnership
    3. Corporation
    4. Limited liability partnership

    Key Financial Statements


    1. Statement of Financial Position
    2. Income Statement
    3. Statement of Comprehensive Income
    4. Statement of Retained Earnings
    5. Statement of Changes in Equity
    6. Statement of Cash Flow
    7. Notes to Financial Statement

    Elements of Financial Position


    1. Assets
    2. Liabilities
    3. Equity

    Elements of Income Statement


    1. Revenues / Income
    2. Expenses
    Elements of Cash Flow Statement
    1. Operating Activities of Cash Flow
    2. Financing Activities of Cash Flow
    3. Investing Activities of Cash Flow
    Objective of Financial Statement Analysis
    1. Profitability
    2. Liquidity and Stability
    3. Asset Utilization / Activity
    4. Debt Utilization / Leverage
    Types of Financial Statement Analysis
    1. Horizontal Analysis
    2. Vertical Analysis
    3. Trend Analysis
    4. Free Cash Flow
    Identification

    1. MAXIMIZATION OF SHAREHOLDERS WEALTH - The expansive goal of Financial Management


    2. PARTNERSHIP - Organization that stops operation when a member dies
    3. CORPORATION - Organization with continuity of existence
    4. AGENCY THEORY - States that goal of manager are in conflict with the goal of
    stockholders/owners
    5. FINANCE - Art and Science of Managing Money
    6. FINANCIAL MANAGEMENT - Effective and Efficient utilization of resources to achieve
    predetermined objectives
    7. STATEMENT OF FINANCIAL POSITION - Shows the financial condition of the business
    8. INCOME STATEMENT - Shows the result of operation of business
    9. STATEMENT of CASH FLOWS - Shows the movement of cash from various activities of the
    business
    10. STATEMENT of COMPREHENSIVE INCOME - Shows the gain and loss that not reported in IS
    11. RETAINED EARNINGS - Represent the accumulated saving of the business be appropriated or not
    12. NOTES TO FINANCIAL STATEMENTS - Bits of information about the business that cannot be
    found in FS
    13. Capital provided by Creditors or Suppliers
    14. OWNER’S EQUITY - Capital provided by owner or stockholders
    15. PROFITABILITY - Ability of the firm to generate income to cover cost and expense
    16. LIQUIDITY and STABILITY - Ability of the firm to meet current obligation using its current assets
    17. BALANCE SHEET and INCOME STATEMENT - Use in the analysis of Financial Statement
    18. VERTICAL ANALYSIS - Type of Financial Analysis need one set of Financial Statement
    19. HORIZONTAL ANALYSIS - Type of Financial Analysis that can be using 2 year set of Financial
    Statement
    20. TREND ANALYSIS - Type of financial analysis that need 5 years set of of FS
    21. STATEMENT of FINANCIAL POSITION - Financial Statement use when analysis focusing in
    profitability of the firm
    22. BALANCE SHEET - Statement to use when analyzing the management of working capital
    23. FREE CASH FLOW - Pertains to residual amount of cash flow after using it to pay firm cost and
    expenses and for investment
    24. IACF - Cash Flow that can be computed by deducting from operating expenses cash flow the
    change in investment in fixed asset net in

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