Financial Management Concepts and Principles

The video tutorial introduces Vity Unlimited Tutors and their services, focusing on business finance and financial management. It covers key decisions in financial management, such as financial planning, control, and decision-making. The tutorial explains the relationships between financial management and other fields like accounting and economics. It discusses the goals and principles of financial management, including profit maximization and shareholder value. The session concludes with an explanation of agency theory, emphasizing the roles and responsibilities of managers.

What is the primary focus of Vity Unlimited Tutors?

• Specializing in tutorials for specific modules

• Conducting research in business finance

• Offering online degrees

• Providing free education to all students

What is another term for business finance?

• Corporate finance

• Business administration

• Financial accounting

• Financial management

Which of the following is NOT a key decision in financial management?

• Financial planning

• Financial auditing

• Financial decision-making

• Financial control

Who is responsible for record-keeping within an organization?

• Economist

• Auditor

• Financial accountant

• Tax accountant

Which professional helps in making production decisions?

• Economist

• Auditor

• Financial manager

• Tax accountant

What is considered a short-term goal in financial management?

• Shareholder wealth maximization

• Cost reduction

• Rate of return maximization

• Profit maximization

Which principle involves assessing the cost and benefit of a decision?

• Risk-return principle

• Cost-benefit principle

• Time value of money

• Profit maximization

What does the risk-return principle suggest?

• Higher risk usually leads to lower returns

• Higher risk usually leads to higher returns

• Lower risk always leads to higher returns

• Risk and return are unrelated

What is the main goal of shareholder wealth maximization?

• Maximizing the company's value over time

• Expanding the company's market share

• Increasing short-term profits

• Reducing operational costs

Which concept explains why money today is worth more than the same amount in the future?

• Cost-benefit analysis

• Risk-return trade-off

• Time value of money

• Profit maximization