Notesale: Turn your study into money

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Financial Management and Business Topics
● Weighted Average Cost of Capital (WACC)
○ WACC is a critical finance concept
○ Focuses on financial manager's decision-making
● Evaluation Focus
○ Involves assessing capital budgeting and investment decisions
○ Emphasis on uncertain future cash inflows and potential profits
● Project Value
○ Attractiveness is determined by comparing project value to the required
investment
● Debt and Equity Mix
○ The financial manager considers the optimal mix between debt and
equity financing
● Analysis of debt versus equity financing
○ Total Firm Value
■ Assessment of the entire firm's value
■ Percentage of debt or equity financing determined by D/B or E/B
● Debt Ratio Determination
○ Comparison of total firm value to determine the debt ratio
○ Participation in finance decisions involves the financial manager,
investors, and the firm
...

Balance Sheet (Statement of Financial Position)
● Structure
○ The structure is divided into two parts: capital assets and non-current
assets
● Current Assets
○ Liquidated within a year
○ Short-term in nature
● Non-Current Assets
○ Fixed assets for the business duration

○ Examples: machinery, equipment, buildings, land
● Financial Assets
○ Income generated by the firm's real assets
○ Examples: bank loans, shares of stock
● Non-Current Assets vs
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Types of Business Organizations
○ Sole proprietorships
○ Partnerships

○ Cooperations
● Sole Proprietorship
○ One-person operation
○ Difficulty in raising capital
● Partnerships
○ Involves two or more individuals
○ Easier capital raising
○ Requires a clear partnership agreement for profit and loss sharing
○ Absence of agreement leads to a judge ruling on a 50-50 basis
● Hybrid Forms
○ Combine characteristics of a corporation and partnership
○ C-segment for everybody
● Financial Manager's Role
○ Also known as treasurer or controller
○ Responsible for significant corporate investment and financing
decisions
○ Duties include cash management, raising new capital, and maintaining
relationships with banks and other investors
● Financial Manager's Responsibilities and Challenges
○ Responsibilities
■ Prepares financial statements
■ Manages internal accounting
■ Handles taxes within a corporation
● The objective is to Maximize current market value
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● Workforce in Financial Services
○ Over half a million people work in financial services
○ Various opportunities for financial managers, including commercial
banking
○ The importance of ethical practices lies in the consideration of potential
consequences and anticipation of future problems arising from such
practices
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Chapter Two
● Focus
○ Focus on the Importance of financial markets for business success
● Financial Markets for Financing
○ Businesses access financial markets and institutions for financing
○ Necessary for various activities like rolling or investing service cash
● Current Ratio Importance
○ The ideal current ratio is one to one
○ Two to one considered the best
○ A three-to-one ratio is undesirable as it may lead to excess cash
holding by investors
● Cash Management
○ Crucial to invest money safely
○ Avoid holding on to excess cash
● Customer Investment Profile
○ Customers should complete an investment profile
○ Determines tolerance level for risky or secure investments
● Risk Preferences
○ Some prefer safe investments
○ Others are more inclined towards risky assets
● Modern Financial System Growth
○ Businesses need to cultivate a modern financial system
○ Involves various forms of refinancing, including corporate investments
and personal savings purchases
● Flow of Savings
○ Essential for businesses to consider the flow of savings to corporate
investments and personal savings
Advice on Financial Planning
● Encouragement for Young People
○ Advises young individuals to build retirement accounts
○ The suggestion involves using money as collateral for future
investments
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RSV Accounts
○ TFSA is easier to manage
○ RSV is more complex
● Flow of Savings to Cooperation
○ Discusses the importance of the flow of savings to cooperation
○ It emphasizes the importance of stopping markets in the financial
market
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4 trillion
● Functions of Banks
○ Accept deposits
○ Make loans
○ Manage assets for state or pension funds
● Casier Insurance Companies
○ Invest in corporate stocks and bonds
○ Occasionally make long-term loans directly to corporations
● Additional Financial Services
○ Provide extra financial services to businesses
○ Examples: Accepting deposits, selling insurance policies
● Relevant Chapters
○ Chapters 1, 2, 3, and 4 contain detailed information on the financial
market and intermediaries
● Practical Living Advice
○ Encouragement to be practical and contribute even while living at
home
● Consideration of real-life expenses, including
○ Rent
○ Telephone bills
○ Cost of living
○ Mention of exhaustion without Wi-Fi during the Christmas holidays
○ Highlighting the prevalence of cell phone use by visiting cousins
Financial Struggles
● Group 1
○ Participants struggling financially
○ Expenses include
■ Phone bill: $100
■ Commuting costs
■ Car insurance
■ Food expenses

○ Speaker emphasizes
■ Not being cheap or irresponsible
■ Focusing on the financial situation
○ Education Expenses
■ Borrowing $40,000 for education
○ Independence Assertion
■ Not dependent on anyone
■ Can buy own food and manage time
○ Toronto Living
■ One-bedroom apartment expenses discussed
○ Central Theme
■ Focus on financial situation and time management
○ Closing Statement
■ Emphasis on personal independence and decision-making
● Group 2
○ Participants
■ Group of men and women knowledgeable in French
○ Scenario
■ Discussion revolves around taking partners out
■ Frequency: One or two times a month
○ Financial Aspect
■ Mention of a bill associated with outings
○ Individual Contributions
■ Person paying $200 a month for services
■ Discussion about favorite dishes
○ Walter Vlogger's House
■ Mention of a person working there
■ Pays a monthly fee of $4

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