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Financial Management - Lecture 1 - Chapter 1 - The Goals and Activities of Financial Management
This is a draft cheat sheet. It is a work in progress and is not finished yet.
Investments vs. Corporate Finance
Investments |
• Involves valuing and choosing stocks/bonds. |
• Investors create a diversified portfolio with securities from multiple companies. |
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Corporate Finance |
• Focuses on deciding which assets or projects the firm should invest in. |
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Time Value of Money (TVM)
Future Value (FV): |
What money today will be worth in the future. |
Present Value (PV): |
What future money is worth today. |
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Financial Management and Careers
Financial Management |
• Overlaps with corporate finance; involves evaluating how outside investors view a company. |
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Careers |
• Corporate financial officer, banker, stockbroker, portfolio manager, financial consultant, etc. |
Activities of Financial Managers
1. Daily Activities |
• Monitoring cash flow, managing credit, overseeing inventory. |
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2. Long-term Activities |
• Negotiating loans, issuing stocks/bonds, planning budgets, and dividends. |
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