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 reading notes: What is corporate finance? |
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正月鼠
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头衔: 海归准将
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加入时间: 2005/05/15
文章: 2553
海归分: 154640
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作者：正月鼠 在 海归商务 发贴, 来自【海归网】 http://www.haiguinet.com
Basic concerns of corporate finance
•； What long-term investment strategy should a company take on?
•； How can cash be raised for the required investments?
•； How much short-term cash flow does a company need to pay its bills?
One way that companies raise cash to finance their investment activities is by selling or “issuing” securities. The securities, sometimes called financial instruments or claims, may be roughly classified as equity or debt, loosely called stocks or bonds.
In what long-lived assets should the firm invest?
•； This question concerns the left-hand side of the balance sheet. Of course, the type and proportions of assets the firm needs tend to be set by the nature of the business. We use the terms capital budgeting and capital expenditures to describe the process of making and managing expenditures on ling-lived assets.
How can the firm raise cash for required capital expenditures?
•； This question concerns the right-hand side of the balance sheet. The answer to this involves the firm’s capital structure, which represents the proportions of the firm’s financing from current and long-term debt and equity.
How should short-term operating cash flow be managed?
•； This question concerns the upper portion of he balance sheet. There is often a mismatch between the timing of cash inflows and cash outflows during operating activities. Furthermore, the amount and timing of operating cash flows are not known with certainty. The financial managers must attempt to manage the gaps in cash flow. From a balance-sheet perspective, short-term management of cash flow is associated with a firm’s net working capital. Net working capital is defined as current assets minus current liabilities. From a financial perspective, the short-term cash flow problem comes from the mismatching of cash inflows and outflows. It is the subject of short-term finance.
Capital structure
•； Creditor: debt buyer.
•； Shareholder: holder of equity shares
•； V = B + S
•； V: the value of the firm in the financial markets.
•； B: the value of the debt
•； S: the value of the equity
The financial manager
•； Treasurer is responsible for handling cash flows, managing capital-expenditures decisions, and making financial plans.
•； The controller handles the accounting function, which includes taxes, cost and financial accounting, and information systems.
How do finance managers create value?
•； The most important job of a financial manager is to create value from the firm’s capital budgeting, financing, and liquidity activities.
•； 1, the firm should try to buy assets that generate more cash than they cost. 2, the firm should sell bonds and stocks and other financial instruments that raise more cash than they cost.
•； Thus the firm must create more cash flow than it uses. The cash flows paid to bondholders and stockholders of the firm should be higher than the cash flows put into the firm by them.
•； If the cash paid to shareholders and bondholders is greater than the cash raised in the financial markets, value will be created.
Cash flows
•； Much of the information we obtain is in the form of accounting statements, and much of the work of financial analysis is to extract cash flow information from accounting statements.
•； The value of an investment made by the firm depends on the timing of cash flows.
•； The amount and timing of cash flows are not usually known with certainty. Most investors have an aversion to risk.
One of the most important assumptions of finance is that individuals prefer to receive cash flows earlier rather than later. One dollar received today is worth more than one dollar received next year.
作者：正月鼠 在 海归商务 发贴, 来自【海归网】 http://www.haiguinet.com
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 reading notes: What is corporate finance? -- 正月鼠 - (3951 Byte) 2005-10-24 周一, 07:57 (1528 reads)
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