Chapter 1 Paragraph Summaries

Finance is essential to the management of a business or organization, especially during hard times.

Bacon Sign recognized their products were better, giving them the ability to reach out to other sign companies to subcontract manufacturing of midsize orders to Bacon Signs.

Bacon Signs ability to manufacture and deliver a high-quality product at a good price was the true value of the firm. Financing was the key to expansion and financial stability for the firm.

What is Finance?

Finance is the study of the management, movement, and raising of money.

What are the three basic areas of Finance?

Business finance, investments, and financial markets and institutions

Business finance: looks at three broad areas on how managers can apply financial principles to maximize the value of a firm in a risky environment.

• Working capital management is the study and management of short term assets and liabilities of the chief financial officer, and the finance team.

• Capital budgeting is the process of determining which long-term or fixed assets to acquire in an effort to maximize shareholder value.