ManagerialFinancial之企业管理.ppt

Managerial Finance: Goals, Decisions, and Environment Goals, Decisions, and Environment What is Corporate Finance? How do corporations differ from other forms of business organization? What are the main questions that corporate finance seeks to address? How do financial managers in corporations create value? What are the goals of financial management? What are the major problems that plague corporations? Goals, Decisions, and Environment Corporate Finance, a definition It is simply any financial or monetary activity that deals with a company and its money. (source: Investopedia website) However, since corporations are different from other types of business organizations, they also face unique opportunities and challenges that the other types do not. Goals, Decisions, and Environment What is a corporation and how does it differ from other types of business organizations such as sole proprietorship and partnership? Goals, Decisions, and Environment A sole proprietorship is a business owned by a single person. Characteristics: Easy and inexpensive to form. Pays no corporate income taxes. Unlimited liability for business debts and obligations. Life is limited to life of the sole proprietor. Money invested in the firm limited to that of the sole proprietor. Goals, Decisions, and Environment A partnership is a business owned by two or more people. Two types exist: general and limited partnerships. Characteristics: Easy and inexpensive to form. Unlimited liability for all debts, how distributed depends on partnership type. Ends when a partner dies or withdraws. Difficult to raise large amounts of cash. Income taxed as partner personal income. Control resides with the partners. Goals, Decisions, and Environment In summary, sole proprietorships and partnerships have one big advantage and several disadvantages: Advantage: start up costs low. Disadvantages: unlimited liability, limited life, and difficulty in transferring ownership. Goals, Decisions, and Environment