Lecture Business finance - Chapter 1: Introduction

Chapter 1 Introduction Copyright 2006 McGraw-Hill Australia Pty Ltd PPTs t/a Business Finance 9e by Peirson, Brown, Easton, Howard and Pinder 1–1 Prepared by Dr Buly Cardak Learning Objectives • Identify the major types of business entity. • Explain the role of the financial manager. • Specify the objective that is necessary to ensure the financial manager makes rational investment and financing decisions. • Identify the major financial decisions made by the managers of business entities. • Identify and explain the basic concepts of finance. Copyright 2006 McGraw-Hill Australia Pty Ltd PPTs t/a Business Finance 9e by Peirson, Brown, Easton, Howard and Pinder 1–2 Prepared by Dr Buly Cardak The Nature of Business Finance • Broad aspects of finance – Corporate finance: the financial management of companies. – Financial institutions and markets. – Investments. • Focus is mainly on corporate finance, but also considers financial institutions and markets, and investments. Copyright 2006 McGraw-Hill Australia Pty Ltd PPTs t/a Business Finance 9e by Peirson, Brown, Easton, Howard and Pinder 1–3 Prepared by Dr Buly Cardak Financial Decisions • Major financial decisions are: – Investment decisions — decisions that determine the asset profile of a business (amount and composition of investments). – Financing decisions — how the assets are to be funded (debt and equity). Financing decisions also involve dividend decisions. • Ultimate objective of investment and financing decisions is to maximise the owners’ wealth. Copyright 2006 McGraw-Hill Australia Pty Ltd PPTs t/a Business Finance 9e by Peirson, Brown, Easton, Howard and Pinder 1–4 Prepared by Dr Buly Cardak Business Structures • Sole proprietorship – Business owned by one person. • Partnership – Business owned by two or more people acting as partners. • Company – Separate legal entity formed under the Corporations Act 2001. • Focus is on financial decision making by managers of public companies. Copyright 2006 McGraw-Hill Australia Pty Ltd PPTs t/a Business Finance 9e by Peirson, Brown, Easton, Howard and Pinder 1–5 Prepared by Dr Buly Cardak ... - tailieumienphi.vn