Financial Management

Introduction to Financial
Management
Chapter 1

McGraw Hill/Irwin
McGraw-Hill

© 2004 The McGraw-Hill Companies, Inc. All rights reserved.

Key Concepts and Skills
 Know

the basic types of financial management decisions and the role of the financial manager
 Know the goal of financial management
 Know the financial implications of the different forms of business organization
 Understand the conflicts of interest that can arise between owners and managers

McGraw Hill/Irwin
McGraw-Hill

© 2004 The McGraw-Hill Companies, Inc. All rights reserved.

Chapter Outline







Finance: A Quick Look
Business Finance and The Financial Manager
Forms of Business Organization
The Goal of Financial Management
The Agency Problem and Control of the Corporation
Financial Markets and the Corporation

1.2
McGraw Hill/Irwin
McGraw-Hill

© 2004 The McGraw-Hill Companies, Inc. All rights reserved.

Basic Areas Of Finance
•
•
•
•

Corporate finance
Investments
Financial institutions
International finance

1.3
McGraw Hill/Irwin
McGraw-Hill

© 2004 The McGraw-Hill Companies, Inc. All rights reserved.

Investments
•
•

•

Work with financial assets such as stocks and bonds
Value of financial assets, risk versus return and asset allocation Job opportunities
•
•
•

Stockbroker or financial advisor
Portfolio manager
Security analyst

1.4
McGraw Hill/Irwin
McGraw-Hill

© 2004 The McGraw-Hill Companies, Inc. All rights reserved.

Financial Institutions
 Companies

that specialize in financial matters

Banks – commercial and investment, credit unions, savings and loans
 Insurance companies
 Brokerage firms


 Job

opportunities

1.5
McGraw Hill/Irwin
McGraw-Hill

© 2004 The McGraw-Hill Companies, Inc. All rights reserved.

International Finance
 This

is an area of specialization among all of the areas discussed so far
 It may allow you to work in other countries