Finance & Accounting

When you finish this course, you should be able to: • Identify the different types of financial markets and financial institutions and explain how these markets and institutions enhance capital allocation. • Explain how the stock market operates and list the distinctions between the dif- ferent types of stock markets. • Explain how the stock market has performed in recent years. • Discuss the importance of market efficiency and explain why some markets are more efficient than others.

This course will give you an idea of what financial management is all about. We begin the chapter by describing how finance is related to the overall business and by discussing the different forms of business organization. For corporations, man- agement’s goal should be to maximize shareholder wealth, which means maximiz- ing the value of the stock.

A manager’s primary goal is to maximize the value of his or her firm’s stock, and value is based on the firm’s future cash flows. But how do managers decide which actions are most likely to increase those flows, and how do investors estimate future cash flows? The answers to both questions lie in a study of financial statements that pub- licly traded firms must provide to investors. Here investors include both institutions (banks, insurance companies, pension funds, and the like) and indiv...

Brief introduction and explanation to types of accounting and the difference between them.

Notes about ratios in accounting and finance.