Financial Management -Lesson 1 and 2

It differs from accounting profit because some of the revenuesand expenses reflected in accounting profits may not have been received or

paid out in cash during the year

• Net Cash flow

• Statement of cash flow

• Balance Sheet

• Income statement

the difference between after-tax operating

profit and the total dollar cost of capital, including the cost of equity capital.

• Market Value Added

• Economic Value Added

• Net Operating Profit after Tax

• Free Cash Flow

represents the difference between the total market

value of a firm and the total amount of investor-supplied capital

• Market Value Added

• Economic Value Added

• NOPAT

• Free Cash Flow

It is the amount of cash flow available for distribution to investors,

so the value of a company is directly related to its ability to generate free cash flow

• Market Value Added

• Economic Value Added

• Free Cash Flow

• NOPAT

It is the after-tax profit a company

would have if it had no debt and no investments in nonoperating assets.

Because it excludes the effects of financial decisions, it is a better measure of

operating performance than is net income.

• market value added

• economic value added

• FCF

• NOPAT

It refers to the system by which corporations are managed and controlled.

• corporate governance

• corporate social responsibility

• corporate ethics

• all of the given answer

A business outlook that acknowledges a firm’s responsibilities to its stakeholders and the natural environment

• Corporate Governance

• Corporate Social Responsibility

• Corporate Vision

• Corporate Mission

is a conflict of interest inherent in any relationship where one party is expected to act in another's best interests

• Agency theory

• Agency

• Agency contract

• Agency problem

A branch of economics relating to the behavior of principals (such as owners) and their agents (such as managers).

• Agency Theory

• Agency

• Agency contract

• Agency problems

•focuses on decisions relating to how much and what types of assets to acquire, how to raise the capital needed to purchase assets, and how to run the firm so as to maximize its value

• Finance

• Financial market

• Financial Investment

• Financial management