FINMAN practice for quiz

Refers to the strategic planning, organizing, directing and controlling of financial activities in an organization. It involves managing funds efficiently to achieve organizational goals.

• Financial Statement

• Cost Accounting
• Investment Strategy
• Financial Management

The 3 answers major questions are:

• Where will the money come from?

  • - Capital Structure

• How much do we earn?
  - Profit earning

• How will the money be used?

  • - Capital Budgeting

• How will profits be managed?

  • - Profit Distribution

This involves deciding how to raise funds

• Capital Structure

• Capital Budgeting

• Profit Distribution

This involves deciding where to invest funds to generate future returns.

• Profit Distribution

• Capital Structure

• Capital Budgeting

This involves deciding how much profit to distribute to shareholders and how much to retain.

• Capital Budgeting

• Profit Distribution

• Capital Structure

A fundamental principle in finance that describes the relationship between risk and potential return.

• Risk-return tradeoff
• Market volatility effect
• Capital asset pricing
• Return on investment

The chance that your investment might lose value.

• Trade-off

• Return

• Risk

The profit or gain you expect from your investment.

• Return

• Risk

• Trade-off

Balancing how much risk you're willing to take for the return you want.

• Risk

• Trade-off

• Return

Money today is worth more than money in the future because it can earn interest.

• Time Value of Money

• Liquidity

• Solvency

• Profitability

• Efficiency/Activity