Business Finance Fundamentals

A set of flashcards covering the core concepts, organizational roles, and financial intermediaries discussed in the Business Finance lecture.

Business Finance

The science of managing money through the efficient and effective allocation, acquisition, and utilization of funds.

Financing Decisions

A function of a financial manager that determines where the company will get funds, such as from owner's investment, bank loans, bonds, or issuing shares.

Investing Decisions

A function of a financial manager that decides where company funds will be invested in long-term assets like land, buildings, equipment, and machinery.

Operating Decisions

A function of a financial manager that deals with daily business operations and manages working capital including cash, inventory, and accounts receivable.

Dividend Policy

The decision regarding how much profit will be distributed to shareholders versus how much will be retained for business growth.

Board of Directors (BOD)

The highest policy-making body of a corporation that represents shareholders and ensures the company serves stakeholders' interests.

President

The leader of the organization who oversees daily business operations, implements company policies, and supervises Vice Presidents.

VP for Marketing

The executive responsible for formulating marketing strategies, directing company sales, and conducting market and competitor analysis.

VP for Operations

The executive responsible for ensuring production meets customer demand, identifying suppliers, and maintaining product quality.

VP for Administration

The executive who oversees Human Resources, recruits and hires employees, and maintains company records.

Treasurer

An official under the VP for Finance responsible for cash management, investor relations, credit and collection, borrowing funds, and employee benefits.

Controller

An official under the VP for Finance responsible for financial reporting, accounting records, internal controls, and budget preparation.

Banks

Financial institutions that accept deposits, provide loans, and offer savings accounts to help manage money.

Stock Exchange

A marketplace for buying and selling shares, specifically Ordinary Shares and Preference Shares.

Stock Brokerage Firms

Firms that assist investors in buying and selling stocks and execute stock market transactions.

Insurance Companies

Entities that provide protection against financial risks and offer insurance policies.

Investment Companies / Mutual Funds

Entities that pool investors' money to be managed by professional fund managers and invested in various financial instruments.

Working Capital

The funds used in the daily operations of the business, including current assets and current liabilities.

Capital Budgeting

The process of evaluating long-term investment projects to determine whether an investment is profitable.

Capital Structure

The combination of debt and equity used to finance a company's assets.