FINANCE INTRO1
What is Finance?
• Finance can be defined as the art and science of managing money.
• Finance is concerned with the process, institutions, markets, and instruments involved in the transfer of money among individuals, businesses, and governments. Copyright © 2006 Pearson Addison-Wesley. All rights reserved.
1-1
Major Areas & Opportunities in
Finance: Financial Services
• Financial Services is the area of finance concerned with the design and delivery of advice and financial products to individuals, businesses, and government.
• Career opportunities include banking, personal financial planning, investments, real estate, and insurance.
Copyright © 2006 Pearson Addison-Wesley. All rights reserved.
1-2
Major Areas & Opportunities in
Finance: Managerial Finance
• Managerial finance is concerned with the duties of the financial manager in the business firm.
• The financial manager actively manages the financial affairs of any type of business, whether private or public, large or small, profit-seeking or not-for-profit. • They are also more involved in developing corporate strategy and improving the firm’s competitive position.
Copyright © 2006 Pearson Addison-Wesley. All rights reserved.
1-3
Legal Forms of Business Organization
Copyright © 2006 Pearson Addison-Wesley. All rights reserved.
1-4
Corporate Organization
Copyright © 2006 Pearson Addison-Wesley. All rights reserved.
1-5
The Managerial Finance Function:
Relationship to Accounting
• The firm’s finance (treasurer) and accounting (controller) functions are closely-related and overlapping.
• In smaller firms, the financial manager generally performs both functions.
Copyright © 2006 Pearson Addison-Wesley. All rights reserved.
1-6
The Managerial Finance Function:
Relationship to Accounting (cont.)
• One major difference in perspective and emphasis between finance and accounting is that accountants generally use the accrual method while in finance, the focus is on cash flows.
• The significance of
• Finance can be defined as the art and science of managing money.
• Finance is concerned with the process, institutions, markets, and instruments involved in the transfer of money among individuals, businesses, and governments. Copyright © 2006 Pearson Addison-Wesley. All rights reserved.
1-1
Major Areas & Opportunities in
Finance: Financial Services
• Financial Services is the area of finance concerned with the design and delivery of advice and financial products to individuals, businesses, and government.
• Career opportunities include banking, personal financial planning, investments, real estate, and insurance.
Copyright © 2006 Pearson Addison-Wesley. All rights reserved.
1-2
Major Areas & Opportunities in
Finance: Managerial Finance
• Managerial finance is concerned with the duties of the financial manager in the business firm.
• The financial manager actively manages the financial affairs of any type of business, whether private or public, large or small, profit-seeking or not-for-profit. • They are also more involved in developing corporate strategy and improving the firm’s competitive position.
Copyright © 2006 Pearson Addison-Wesley. All rights reserved.
1-3
Legal Forms of Business Organization
Copyright © 2006 Pearson Addison-Wesley. All rights reserved.
1-4
Corporate Organization
Copyright © 2006 Pearson Addison-Wesley. All rights reserved.
1-5
The Managerial Finance Function:
Relationship to Accounting
• The firm’s finance (treasurer) and accounting (controller) functions are closely-related and overlapping.
• In smaller firms, the financial manager generally performs both functions.
Copyright © 2006 Pearson Addison-Wesley. All rights reserved.
1-6
The Managerial Finance Function:
Relationship to Accounting (cont.)
• One major difference in perspective and emphasis between finance and accounting is that accountants generally use the accrual method while in finance, the focus is on cash flows.
• The significance of