BRIDGING

Question 1

Primary objective of financial management

Answer 1

Attempting to reduce cost of finance

Ensuring Sufficient availability of funds

Deals with planning, organizing, and controlling of financial activities like the procurement and utilization of funds.

Question 2

The lifeline of any business

Answer 2

Finance

Question 3

WHO:Financial Management is the activity concerned with planning, raising, controlling and administering of funds used in the business

Answer 3

Guthman and Dougal

Question 4

WHO:Financial Management is the area or business management devoted to judicious use of capital and careful selection of sources and capital in order to enable a spending unit to move in the direction of reaching the goals.

Answer 4

J.F. Brandley

Question 5

WHO:Financial management is the operational activity of a business that is responsible for obtaining and effectively utilizing the funds necessary for efficient operation

Answer 5

Massie

Question 6

An organic function of any business

Answer 6

Financial Management

Question 7

THEORIES around financial management

Answer 7

1. Experts believe that FM is all about providing funds needed by a business on terms that are most favorable, keeping objectives in mind.
2. Finance is all about cash
3. Widely accepted: FM includes the procurement of funds and their effective utilization.

Question 8

It is important that financial decisions take care of the ______ interest.

Answer 8

Stakeholders’

Question 9

SCOPES OF FINANCIAL MANAGEMENT

Answer 9

Financing Decision
Investment Decision
Dividend Decision

Question 10

SCOPES OF FINANCIAL MANAGEMENT: Manager decide on the amount of investment available out of the existing finance on a long-term and short term basis

Answer 10

Investment Decision

Question 11

Other word for long term investment decision

Answer 11

Capital Budgeting

Question 12

It means committing funds for a long period of time like fixed assets

Answer 12

Long-term Investment or Capital Budgeting

Question 13

Other term for short term investment

Answer 13

Working Capital

Question 14

Committing funds for a short period of time like current assets

Answer 14

Short-term investment or Working Capital

Question 15

TWO types of investment

Answer 15

Long-term Investment or Capital Budgeting

Short-term investment or Working Capital

Question 16

SCOPES OF FINANCIAL MANAGEMENT: Managers also make decision pertaining to raising finance from long-term sources and short- term sources.

Answer 16

Financing Decision

Question 17

TWO sources of Financing Decision

Answer 17

Capital Structure (long-term)

Working Capital (short-term)

Question 18

TWO types of Financing Decision

Answer 18

Financial Planning Decisions

Capital Structure Decisions

Question 19

FINANCING DECISIONS: Relates to estimating the sources and applicaiton of funds

Answer 19

Financial Planning Decisions

Question 20

FINANCING DECISIONS: Identify sources of funds

Answer 20

Capital Structure Decisions

Question 21

Involve decisions with respect to choosing external sources

Answer 21

Capital Structure Decisions

Question 22

SCOPES OF FINANCIAL MANAGEMENT: Involve decisions related to the portion of profits that will be distributed as dividend

Answer 22

Dividend Decisions

Question 23

FINANCIAL SERVICE: the process of developing a personal roadmap for your financial well being.

Answer 23

Personal Financial Planning

Question 24

FINANCIAL SERVICE: An ongoing process that looks at our entire financial picture in order to create strategies for achieving your short-term and long-term goals.

Answer 24

Investment

Question 25

FINANCIAL SERVICE: A branch of finance that focuses on how people purchase real estate, whether that be home, an office or a plot of land

Answer 25

Real Estate

Question 26

FINANCIAL SERVICE: refers to a comprehensive plan of your long term and short term objectives for financial security

Answer 26

Personal Financial Planning

Question 27

5 FINANCIAL SERVICE

Answer 27

- Banking - Personal Financial Planning - Investment - Real Estate - Insurance

Question 28

3 MANAGERIAL FINANCE

Answer 28

Financial Analyst Capital Budgeting Analyst Cash Manager

Question 29

MANAGERIAL FINANCE: Guide businesses and individuals in decisions about expending money to attain profit

Answer 29

Financial Analyst

Question 30

MANAGERIAL FINANCE: Summarize budgets and offer insights regarding the finds request

Answer 30

Capital Budgeting Analyst

Question 31

MANAGERIAL FINANCE: A professional who handles the financial transactions of an organization or client

Answer 31

Cash Manager

Question 32

A business owned by one person and operated for one's own profit

Answer 32

Sole Proprietorship

Question 33

The owner is legally responsible for the debts and taxes of the business and very involved in its day to day activities.

Answer 33

Sole Proprietorship

Question 34

The most common form of business organization

Answer 34

Sole Proprietorship

Question 35

A business owned by two or more people and operated for profit

Answer 35

Partnership

Question 36

Partnership is based on an agreement called _______

Answer 36

Article of Co-Partnership

Question 37

Partnership is dissolved when______

Answer 37

A partner withdraws or dies

Question 38

An entity created by law

Answer 38

Corporation

Question 39

They have legal powers of an individual in that it can sue and be sued, make and be party to contracts, and acquire property in its own name

Answer 39

Corportation

Question 40

Advantages of Corporation

Answer 40

Limited Liability of stakeholders and perpetual life

Question 41

Only form of business that is a separate legal entity

Answer 41

Corporation

Question 42

A study of choice

Answer 42

Economics

Question 43

The study of financial allocation that can provide insights on where to pit ones money and why it is necessary.

Answer 43

Finance

Question 44

They recognize revenues at the point of sale and consider expenses when incurred, regardless of the direction of cash flow in the firm.

Answer 44

Accountants

Question 45

Decision Rule for managers

Answer 45

Only take actions that are expected to increase the share price.

Question 46

The reasons why it might not lead to the highest possible share price

Answer 46

- Timing is important - Profits do not necessarily result in cash flows available to stockholders - Profit maximization fails to account for risk

Question 47

The two(2) key activities related to a firm’s balance sheet

Answer 47

Financing Decisions Investment Decisions

Question 48

KEY ACTIVITIES RELATED TO A FIRM'S BALANCE SHEET: Deals with the items that appear on the asset section of the balance sheet

Answer 48

Investment Decisions

Question 49

KEY ACTIVITIES RELATED TO A FIRM'S BALANCE SHEET: Generally refers to the items that appear on the liability and equity section of the balance sheet

Answer 49

Financing Decisions

Question 50

FINANCIAL OR MANAGERIAL: Concerned with the design and delivery of advice and financial products to individuals, businesses and governments.

Answer 50

FINANCIAL SERVICE

Question 51

FINANCIAL OR MANAGERIAL: Concerned with the duties of a Financial Manager working in a business. This encompasses financial planning or budgeting, credit extensions to customers or other credit admin function, investment evaluation and analysis, and obtaining of funds acquisition for a firm.

Answer 51

MANAGERIAL FINANCE

Question 52

PROFESSIONAL CERTIFICATIONS IN FINANCE: A graduate-level course of study offered by CFA Institute which is focused largely on the investment side of finance.

Answer 52

CHARTERED FINANCIAL ANALYST(CFA)

Question 53

PROFESSIONAL CERTIFICATIONS IN FINANCE: This program requires students to pass a single exam that assesses knowledge and skills needed in working for a corporate treasury department.

Answer 53

CERTIFIED TREASURY PROFESSIONAL(CTP)

Question 54

PROFESSIONAL CERTIFICATIONS IN FINANCE: To obtain CFP status, students should pass a 10-hour exam covering a wide range of topics related to personal financial planning.

Answer 54

CERTIFIED FINANCIAL PLANNER(CFP)

Question 55

PROFESSIONAL CERTIFICATIONS IN FINANCE: This administers certification programs for financial professionals in a wide range of fields. The certifications they issue include the Charter Portfolio Manager, Chartered Asset Manager, Certified Risk Analyst, Certifies Cost Accountant and Certified Credit Analyst.

Answer 55

AMERICAN ACADEMY OF FINANCIAL MANAGEMENT(AAFM)

Question 56

PROFESSIONAL CERTIFICATIONS IN ACCOUNTING

Answer 56

- CERTIFIED PUBLIC ACCOUNTANT(CPA) - CERTIFIED MANAGEMENT ACCOUNTANT(CMA), - - CERTIFIED INTERNAL AUDITOR(CIA)

Question 57

FINANCE OR ACCOUNTING: ACCRUAL METHOD

Answer 57

ACCOUNTING

Question 58

FINANCE OR ACCOUNTING: RECOGNIZE REVENUES AT THE POINT OF SALE AND CONSIDER EXPENSES WHEN INCURRED, REGARDLESS OF THE DIRECTION OF CASH FLOW IN THE FIRM

Answer 58

ACCOUNTING

Question 59

FINANCE OR ACCOUNTING: CASH FLOW

Answer 59

FINANCE

Question 60

FINANCE OR ACCOUNTING: ACTUAL INFLOWS AND OUTFLOWS OF CASH, RECOGNIZING REVENUES WHEN CASH IS COLLECTED AND CONSIDERING EXPENSES WHEN ACTUALLY PAID

Answer 60

FINANCE

Question 61

A system rules, practices and processes by which a company is directed and controlled.

Answer 61

Corporate Governance

Question 62

It refers to the way in which companies are governed and to what purpose.

Answer 62

Corporate Governance

Question 63

It identifies who has power and accountability, and who makes decisions.

Answer 63

Corporate Governance

Question 64

MAJOR PARTICIPANTS IN AN ORGANIZATION

Answer 64

- Shareholders - Board of Directors - Managers - Officers of Corporation

Question 65

Refers to implementing appropriate business policies and practices with regard to arguably controversial subjects.

Answer 65

Business ethics

Question 66

The standards of conduct or moral judgement that apply to persons engaged in industry or commerce. Violations of these standards in finance include, but not limited to misstated financial statements, misleading financial forecast or projections, fraud, bribery, kickbacks, insider trading, excessive executive compensations, and options backdating.

Answer 66

Business ethics

Question 67

When managers deviate from the goal of maximization of shareholder wealth by putting their personal goals above the goals of shareholders, this results to __________

Answer 67

agency problem and issues

Question 68

AGENCY PROBLEM AND ASSOCIATED AGENCY COST CAN BE REDUCED THROUGH THE FOLLOWING:

Answer 68

1. Properly Constructed and Implemented Corporate Governance Structure 2. Structure expenditures thru compensation plans 3. Market Forces Such As Shareholder Crusading From Large Institutional Investors 4. Threat of Hostile Takeovers