Chapter 1: Introduction
Explain and reflect on the meaning of the terms corporate finance & financial management
• It expresses the essential features of the financial
function and its management.
Corporate finance • Key department
• Financial departments + staff financial manager
Value:
~ Different from profit (can be manipulated by fair value
adjustments_
~ example shareholder’s value lies in their dividends
Ways to create value:
Increase profit
Increase returns
Increase share price; shareholders wealth
• Process of creating value in the organisation.
Financial management • Process concists of planning, organising, directing and
controlling the financial activities of a business.
Explain the role and responsibilities of the financial managers (discuss three types of
financial management decisions and identify the main goals of fin managers)
Responsible for an organisation’s
Financial management decisions: financial management activities
Capital budgeting Involves acquisition and management of non- current assets
Called capital projects or investments.
Managers should only invest in value adding non- current assets:
Explain and reflect on the meaning of the terms corporate finance & financial management
• It expresses the essential features of the financial
function and its management.
Corporate finance • Key department
• Financial departments + staff financial manager
Value:
~ Different from profit (can be manipulated by fair value
adjustments_
~ example shareholder’s value lies in their dividends
Ways to create value:
Increase profit
Increase returns
Increase share price; shareholders wealth
• Process of creating value in the organisation.
Financial management • Process concists of planning, organising, directing and
controlling the financial activities of a business.
Explain the role and responsibilities of the financial managers (discuss three types of
financial management decisions and identify the main goals of fin managers)
Responsible for an organisation’s
Financial management decisions: financial management activities
Capital budgeting Involves acquisition and management of non- current assets
Called capital projects or investments.
Managers should only invest in value adding non- current assets:
