Financial Management
Fundamental Decisions in Financial Management
In financial management, there are three fundamental decisions, which are central to capital budgeting, capital structure and working capital management. Capital budgeting refers to the process of planning and managing the company's long-term investments. Capital structure refers to the particular mixture of long-term debt and equity a company utilizes to fund its functions. Working capital management refers to the company's short-term assets, which may include inventory, and its short-term liabilities (Parrino, Kidwell and Bates, 2011).
Pros and Cons of the three forms of business ownership
Sole Proprietorship
Advantages
It is easy to start and end a business
There is no sharing of profits
It does not involve any special taxes
Disadvantages
Available funds are limited to what the owner has
There are management issues
There are limited developments
Partnerships
Advantages
The business experiences more financial resources
There is shared management, which enhances growth of the business
Partnerships are likely to succeed when compared to sole proprietorships
Disadvantages
There is unlimited liability
There is division of profits
There are likelihoods of disagreements among partners
Corporations
Advantages
Corporations can raise substantial funds
It has a perpetual life
There is ease of change in ownership
Disadvantages
Corporations experience double taxations
Corporations involve extensive paperwork
There is difficulty of termination in corporations
Importance of ethics in business
Finance doe not teach people on ways of becoming rich, rather it teaches people how to become rich. On the other hand, ethics teaches people to be morally good in their activities. Therefore, when incorporated in the financial sense, it will teach businesspersons...
Financial Scandals and Management Financial Management Management Financial Actions, Controls, and Decisions Financial Scandals and Management Following the rise of financial scandals in the recent past, external and internal audits are carried out to review the management's financial controls and actions, and keep tab of the outside and internal auditors. However, despite the best efforts, accounting scandals like the Cendant Corporation's $300 million bogus revenue indicate that external auditors and managers are not doing
Management Accounting The objective of this study is to discuss and evaluate the purpose and effectiveness of strategic management accounting for modern businesses. The answer should be supported with at least one business currently in operation on the London Stock Exchange, discussing the ways in which strategic management accounting can support the business in managing the current challenges it faces. Strategic Management Accounting is addressed in the work of Cheong (nd) who
Individuals work half a day, or weekly based on the sharing arrangements. Split and sharing of the jobs leads to the organizations benefit, as talented individuals who are unable to work on a fulltime basis get an employment chance. Although adjustment problems occur, the arrangement of a proper schedule is required. III. Telecommuting also known as the flexiplace, is a working condition that allows the least portion of the scheduled
Management as a Profession According to the Merriam Webster dictionary, a Profession is: a. A calling requiring specialized knowledge and often long and intensive academic preparation b. A principal calling, vocation, or employment and c. The whole body of persons engaged in a calling. Increasingly management as a class of employment has come to be seen as a profession which qualifies on all three levels of this definition. Though there are
Furuholt, (2006) argues that lack of management engagement to the acceptance of information systems has been a barrier to the implementation of information systems. The issues are even common with organizations in the developing countries where management does not give enough priority to the information systems implementation. Importantly, implementation of information systems requires management support since management will need to approve fund that would be used for IS implementation.
Despite this fundamental difference, financial and compliance managers work together as healthcare organizations make decisions to lower cost, increase revenue, and improve care. The concept of lowering cost while improving care presents a complex demand, and requires both financial and compliance officers to possess fundamental management knowledge, and similar professional skills in order to implement accounting and ethical standards (Buelow, et al. 2010). For example, a legal requirement or
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