- Study guides, Class notes & Summaries

Accounting – backward looking, measure past operations Financial Management – forward looking, focus on executive future transactions, based on expected future cash flows Principles of Financial Decision-Making: 1. Efficient Market Prices - Effective decision-making depends on market efficiency a. Effective Requirements: Which is more efficient? Buying gas or Selling house? i. Competitive – many buyers and sellers ii. Liquid – can sell/buy quickly iii. Transparent – bid/ask pr...