MANAGERIAL FINANCE Chapter I Introduction DOCX

Title	MANAGERIAL FINANCE Chapter I Introduction
Author	Alice Batamuliza
Pages	49
File Size	164.3 KB
File Type	DOCX
Total Downloads	327
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Summary

1 MANAGERIAL FINANCE Chapter I Introduction  What is Finance? Finance can be defined as the art and science of managing money. Virtually all individuals and organizations earn or raise money and spend or invest money. Finance is concerned with the process, institutions, markets, and instruments inv...

Description

1 MANAGERIAL FINANCE Chapter I Introduction What is Finance? Finance can be defined as the art and science of managing money. Virtually all individuals and organizations earn or raise money and spend or invest money. Finance is concerned with the process, institutions, markets, and instruments involved in the transfer of money among individuals, business, and governments. Most adults will benefit from an understanding of finance, which will enable them to make better personal financial decisions. Those who work in non-financial jobs will benefit by being able to interact effectively with the firm's financial personnel, process, and procedures. Major areas and opportunities in Finance The major areas of finance can be summarized by reviewing the career opportunities in finance. These opportunities can, for convenience, be divided into two broad areas: Financial services and managerial finance. Financial Services. This is the area of finance concerned with the design and delivery of advice and financial products to individuals, business and government. It involves a variety of interesting career opportunities within the areas of banking and related institutions, personal financial planning, investment, real estate, and insurance. Management Finance. This is concerned with the duties of financial manager in the business firm. Financial manager actively manage the finance affairs of any type of business (financial and nonfinancial, private and public, large and small, profit-seeking and not-for-profit). They perform such varied financial tasks as planning, extending credit to customers, evaluating proposal large expenditures, and raising money to fund the firm's operations. Legal Forms of Business Organization The three most common legal forms of business organization are the sole proprietorship, the partnership, and the corporation. Sole proprietorship. A business owned by one person and operated for his or her own profit. The typical sole proprietorship is a small business. Typically, the proprietor, along with a few employees, operates the proprietorship. He or she normally raises capital from personal resources or by borrowing and is responsible for all business decisions. The sole proprietorship has unlimited liability; his or her total wealth (not merely the amount originally invested) can be taken to satisfy creditors. Partnership. A business owned by two or more people and operated for profit. Most partnerships are established by a written contract known as articles of partnership. In a general (or regular) partnership, all partnerships have unlimited liability, and each partner is legally liable for all of the debts of the partnership....