《财务管理专业英语》教学课件01.ppt

1.1 Financial Management and Financial Manager 1.2 Financial Management Decision 1.3 Risk–Return Tradeoff FINANCIAL MANAGEMENT AND FINANCIAL MANAGER Financial management is an integrated decision-making process concerned with acquiring, financing, and managing assets to accomplish some overall goal within a business entity. managerial finance corporate finance business finance CEO- chief executive officer CFO- chief financial officer FINANCIAL MANAGEMENT DECISION Long-term investment decisions Long-term financing decisions Working Capital Management Decisions FINANCIAL MANAGEMENT DECISION Long-term investment decisions In what lines of business should the firm engage? Should the firm acquire other companies? What sorts of property, plant, and equipment should the firm hold? Should the firm modernize or sell an old production facility? Should the firm introduce a more efficient distribution system than the current one? FINANCIAL MANAGEMENT DECISION Long-term financing decisions Does the type of financing used make a difference? Is the existing capital structure the right one? How and where should the firm raise money? Should the firm use funds raised through its revenues? Should the firm raise money from outside the business? If the firm seeks external financing, should it bring in other owners or borrow the money? FINANCIAL MANAGEMENT DECISION Working Capital Management Decisions How much of a firm’s total assets should the firm hold in each type of current asset such as cash, marketable securities, and inventory? How much credit should the firm grant to customers? How should the firm obtain needed short-term financing? FINANCIAL MANAGEMENT DECISION RISK–RETURN TRADEOFF risk aversion—— investors should expect a higher return for taking on higher levels of risk