Practical financial manager 4th ed william laser

Practical financial manaegment  lasher 7th ed chapter  01 foundattions

Practical financial manaegment lasher 7th ed chapter 01 foundattions

... Investments and financial markets Financial management of corporations Fields are separate but related Financial Assets Real asset—Objects that provide services: houses, cars, food, etc Financial asset—a ... limited to financial market activity – Now – Corporate finance includes the financial management of organizations Financial Management The management and control of money an...
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Practical financial manaegment  lasher 7th ed chapter  02

Practical financial manaegment lasher 7th ed chapter 02

... its service life Can be straight lined or accelerated Cost recorded on the income statement does not = cash spent The Nature of Financial Statements Three Financial Statements – Income statement ... reported net of reserve – Writing Off Bad Inventory Missing, damaged, or obsolete items removed from gross and reserve leaving net unchanged 16 Assets Overstatements – If assets are overstated...
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Practical financial manaegment  lasher 7th ed chapter  03

Practical financial manaegment lasher 7th ed chapter 03

... Sources of Financial Information Annual Report – Management's report card to stockholders on own performance – The primary source of financial information – Required of publicly traded companies ... Line – Credit reports – Must be audited – GAAP Orientation of Financial Analysts Critical and investigative Looking for current or potential problems Looking for the physical reasons behind...
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Practical financial manaegment  lasher 7th ed chapter  04

Practical financial manaegment lasher 7th ed chapter 04

... Firms 15 Financial Plan as a Component of a Business Plan Financial plan is the financial portion of the business plan – A set of pro forma financial statements projected over a time period – Financials ... Procedural Approach – Financial plans are built line-by-line beginning with revenues Debt/Interest Planning Problem – The next items needed are interest expense and debt – Planne...
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Practical financial manaegment  lasher 7th ed chapter  05

Practical financial manaegment lasher 7th ed chapter 05

... procedures under which businesses are organized and run – Focused on ethics and legality of financial relationships between top managers and the corporations they serve – The idea is connected ... and stockholders Two major financial crises thus far in the 21st century – Stock market crash of 2000 caused by financial reporting fraud – Financial crisis of 2008 caused by the subprime mo...
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Practical financial manaegment  lasher 7th ed chapter  06

Practical financial manaegment lasher 7th ed chapter 06

... If PV is entered as positive the computed FV is negative 12 Financial Calculators Basic Calculator functions Financial Calculators What is the present value of $5,000 to be received in one year ... largest financial transaction in a person’s life – Mortgages are typically amortized loans, compounded monthly over 30 years Early years most of payment is interest Later on principal is redu...
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Practical financial manaegment  lasher 7th ed chapter  07

Practical financial manaegment lasher 7th ed chapter 07

... the cash flows expected from owning it In bonds, the expected cash flows are predictable – – Interest payments are fixed, occurring at regular intervals Principal is returned along with the last ... may be in financial trouble Buying the bond is very risky In theory riskier loans should be discounted at higher rates leading to lower calculated prices 37 Convertible Bonds Unsecured bonds exc...
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Practical financial manaegment  lasher 7th ed chapter  08

Practical financial manaegment lasher 7th ed chapter 08

... Stock valuation models give estimated results since the inputs are approximations of reality Actual growth rate can be VERY different from predicted growth rates 27 Practical Limitations of Pricing ... (the holder) the right to buy stock at a fixed price (the exercise or strike price) for a specified time period – Once expired, it can’t be exercised – Option price < price of the underlying...
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Practical financial management  lasher 7th ed chapter  09

Practical financial management lasher 7th ed chapter 09

... The Expected Return The expected return on stock is the return investors feel is most likely to occur based on current information – Anticipated return based on the dividends expected as well ... equal to their required return for that stock – – CAPM attempts to quantify how required returns are determined The stock’s value (price) is estimated based on CAPM’s required return for that stock ....
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Practical financial management  lasher 7th ed chapter  010

Practical financial management lasher 7th ed chapter 010

... Long-Lived Project has the higher EAA, it should be chosen This is the same decision reached by the Replacement Chain Method 37 Capital Rationing Used when capital funds for new projects are limited ... acquired with it are both called capital Capital Budgeting Planning and Justifying How Capital Dollars Are Spent On Long Term Projects Provides methods for evaluating whether projects make fi...
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Practical financial management  lasher 7th ed chapter  011

Practical financial management lasher 7th ed chapter 011

... new assets when needed Include working capital Depreciation: Plan depreciation for new and old assets A non-cash item but it impacts taxes Taxes and Earnings Summarize tax deductible items in ... Last year purchased a gearshift design for $50,000 Facilities are at capacity, so a new shop is required Company owns land nearby New building will cost $60,000 Land purchased 10 years ago for ... fo...
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Practical financial management  lasher 7th ed chapter  012

Practical financial management lasher 7th ed chapter 012

... different from expected is related to the variance or standard deviation Figure 12-2 Risk in Estimated Cash Flows The Importance of Risk in Capital Budgeting Until now we have viewed cash flows as ... budgeting – Generally increases a project's expected NPV 25 The Abandonment Option A poorly performing project can sometimes be abandoned – Usually by redeploying project resources to another us...
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