财务管理基础13版1The Goals and Functions of Financial Management.ppt

The Goals and Functions of Financial Management 1 Chapter Outline Introduction to Finance Forms of Organizations Risk-Return Tradeoff Primary Goal of Financial Managers Role of Financial Managers Relationship between Finance, Economics and Accounting Economics provides structure for decision making in many important areas Provides a broad picture of economic environment Accounting provides financial data in various forms Income statements Balance sheets Statement of cash flows Finance links economic theory with the numbers of accounting Evolution of the Field of Finance At the turn of the century: Emerged as a field separate from economics By 1930s: Financial practices revolved around such topics as: Preservation of capital Maintenance of liquidity Reorganization of financially troubled corporations Bankruptcy process Evolution of the Field of Finance (cont’d) By mid-1950s: Finance becomes more analytical Financial capital (money) was used to purchase real capital (long-term plant and equipment) Cash and inventory management Capital structure theory Dividend policy Modern Issues in Finance Focus has been on: Risk-return relationships Maximization of return for a given level of risk Portfolio management Capital structure theory New financial products with a focus on hedging are being widely used Inflation – a key variable in financial decisions Modern Issues in Finance (cont’d) The following are significant to financial managers during decision making: Effects of inflation and disinflation on financial forecasting Required rates of return for capital budgeting decisions Cost of capital The Impact of the Internet Internet and its acceptance has enabled acceleration of e-commerce solutions for “old economy” companies E-commerce solutions for existing companies B2C B2B Spurt in new business models and companies A eBay The Impact of the Internet (cont’d) For a financial manager, e-commerce impacts financial management because it affects the pattern and field through wh