Comprehensive Business Finance Foundations and Management Notes

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11 Terms

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Definition of Finance
Finance is defined as the science and art of managing money.
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Purpose of Budgeting
Budgeting is the act of estimating revenue and expenses over a specific period of time.
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What are Sources of Funds?
The origins of money sought when faced with financial difficulties.
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Investment Definition
The act of allocating money with the expectation of generating income or appreciation.
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Sole Proprietorship
A business owned by exactly 1 person for the owner's profit.
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Partnership Definition
A business owned by 2 or more people, operated for profit.
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Wealth Maximization Objective
The fundamental objective of a shareholder is Wealth Maximization.
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Functions of CFO
Core functions include financing, investing, operating, and determining dividend policies.
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Short-Term Sources Features
Lower interest rates with a trade-off between profitability and liquidity risk.
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Corporate Structure Hierarchy
Shareholders elect the Board of Directors who make the highest policy decisions.