FINMAN CHAPTER 1 REVIEWER (Theories and Solving)

The science and art of managing money

• Financing

• Financial Management

• Finance

• Managerial Finance

Concerned with individuals’ decision about how much of their earnings they spend, how much they save, and how they invest their savings.

• Business Level

• Personal Level

involves the same types of decisions; how firms invest money in an attempt to earn profit; and how they decide whether to reinvest profits in the business or distribute them back to investors

• Personal Level

• Business Level

• Managerial Level

concerned with the acquisition, financing, and management of assets with some overall goal in mind

• Finance

• Financial Management

• Financing

• Asset Management

Most important of the firm’s three major decisions when it comes to value creation. It begins with a determination of the total amount of assets needed to be held by the firm.

• Finance

• Financial Management

• Investment

• Asset Management

Concerned with the makeup of the right-hand side of the balance sheet; mechanics of getting a short-term loan, entering into a long-term lease arrangement, or negotiating a sale of bonds or stock must be understood.

• Financing

• Financial Management

• Investment

• Asset Management

The financial manager is charged with varying degrees of operating responsibility over existing assets.

• Financing

• Financial Management

• Investment

• Asset Management

Concerned with the design and delivery of advice and financial products to individuals, businesses, and governments. It involves a variety of interesting career opportunities within the areas of banking, personal financial planning, investments, real estate, and insurance.

• Financial Services

• Managerial Finance

• Financial Management

• Business Finance

Concerned with the duties of the financial manager working in a business. They administer the financial affairs of all types of businesses: private and public, large and small, profit seeking and not for profit.

• Financial Services

• Managerial Finance

• Financial Management

• Business Finance

A business owned by one person who operates it for his or her own profit.

• Sole Proprietorships

• Partnerships

• Corporations

• Limited Liability Company