Among solutions to the agency problem in publicly-held corporations are all of the following EXCEPT Answer a. stock options. b. performance shares. c. cash bonuses tied to goal achievement. d. bonuses based on short-term results. 4 points A more recent issue that is causing major problems in the business community is Answer a. the privatization of ownership.
Cash Inflows Income from sales: The money earned from selling goods and services creates an inflow of cash to the business. This is often called sales revenue or turnover. Loans from banks: it is common for a new business to borrow money in order to buy new items such as vehicles, machinery or property. When the loan is given to the business, this becomes a cash flow for the business. Money invested by the business’ owners: When a business is first started, its owners (sole traders or shareholders, for example) may invest money into the business, resulting in a cash flow.
There are three main categories for the Statement of Cash Flows. The first is the “Cash flows from operating activities”. This category includes the cash activities for the daily transactions of the company. This includes the revenues the company makes from its business and the expenses related to making this revenue (payments to creditors, utilities, salaries, etc.). Investing activities have to do with the company buying a major asset, such as land, large equipment, buildings, etc.
Financial Management FIN/370 Michael Curtis May 21, 2012 Financial Management Create a list of definitions for the following terms and identify their roles in finance. 1. Finance - Finance is the process of creating, moving and using money, enabling the flow of money through a company. Finance deals with matters related to money and the markets. 2.
6. Get a second job to help finance your investment costs. The two major ways to invest are; lend or own. 1. When you lend, you are a Debt Investor.
Crimes such as there are always unacceptable do to the creation of uncertainty in the markets. The fear is bad for business in the United States and in the world as a whole. Many investors’ lost substantial amounts of money due to the scandals. The Sarbanes-Oxley now places a tighter regulation and control on the reporting of a company’s financial reports while holding those within the company accountable with criminal charges. With all the modifications and changes that are now being enforces, business investments into public companies in the United States is
The pro forma statements are commonly used when applying for a business loan. Typically, the investor will require a business owner to submit a pro forma statement with the loan application. Company’s carrying inventory must have a pro forma statement that would show the impact of the amount borrowed on the current assets and will also show the liabilities on the current balance sheets. This provides management with realistic numbers of the amount of cash required by the company. There are a wide variety of ways one can benefit from the pro forma
Financial Management Definitions and Concepts Patrice Colbert FIN/370 May 14, 2012 Finance: the study of money: The study of how businesses manage funds in order to operate to make profits, and how individuals manage their financial resources economically. The study of finances and learning the 4 principles of finance plays an important role as it assists to understanding how and why businesses and individual make financial decisions. Efficient market: Market where all pertinent information is available to all participants at the same time, and where prices respond immediately to available
When the interest rates are low, more funds are available; companies expand with the increase in employment. When the interest rates are high, fewer funds are available; companies do not tend to expand with the decrease in employment. So the point is implementing policy by raising or lowering interest rates can affect the demand for goods and services. In conclusion, the main purpose of money is to buy goods and services that are available in the markets. Money has four major functions and medium of exchange is what the nation uses the most in current economy.
The income statement and the balance sheet can often be misleading to an investor as there are many ways to record the dispensing of an asset or other types of financial obligations (Financial Statements: A Step-by-Step Guide to Understanding and Creating Financial Reports, 2009). The cash flow statement contains three sections: the cash flows from operating activities, which shows how much money the business received from operating the business; the cash flows from investing activities, which shows the money the business has gained or loss from investing; and the cash flow from financing activities, which shows the money that was taken in or paid out to finance the different business activities. Using the cash flow statement allows an investor to see if a business is generating more money than is used to operate the business. If this is happening regularly, the business is considered healthy and should be a good