The function in a business that acquires funds for the firm and manages those funds within the firm.
the Job of managing a firm's resources so it can meet its goals and objectives.
Managers who examine financial data prepared by accountants and recommend stategies for improving the financial performance of the firm.
Forcast that predicts revenues, cost, and expenses for a period of one year or less.
Cash Flow Forcast
Forcast that predicts the cash inflows and outflows in future periods, usually months or quarters.
A financial Plan that sets forth managment's expectaions, and, on the basis of those expectaions, allocates the use of specific resources throughout the firm.
Forcast that predicts revenues, cost, and expenses for a period longer than 1 year, and sometimes as far as 5 or 10 years into the future.
A budget that highlights a firm's spending plans for major assets purchased that often require large sums of money.
A budget that estimates cash inflows and outflows during a particular period like a month or quarter.
Operating (or master) Budget
The budget that ties together the firm's other budgets and summarizes its proposed financial activities.
A Process in which a firm periodically compares its actual revenues, costs, and expenses with its budget.
Major investments in either tangible long-term assets such as land, buildings, and equipment or intangible assets such as patents, trademarks and copyrights.
Funds raised through various forms of borrowing that must be repaid.
Money Raided from within the firm, from operations or through the sale of ownership in the firm (stock)
Funds needed for a year or less.
Funds needed for more than a year (usually 2 to 10 years)
The practise of buying goods and services now and paying for them later.
A written contract with a promise to pay a supplier a specific sum of money a a definite time.
A loan backed by collateral, something valuble such as property.
A loan that doesn't require any collateral.
Line of Credit
A given amount of unsecured short-term funds a bank will lend to a business, provided the funds are readily availible.
Revolving Credit Agreement
A line of credit that's guaranteed but usually comes with a fee.
Commercial Finance Companies
Organizations that make short-term loans to borrowers who offer tangible assets ass collateral.
The process of selling accounts receivable for cash.
Unsecured promissor notes of $100,000 and up that mature (come due) in 270 days or less.
A promissory note that requires the borrower to repay the loan in specified installments.
The principle that the greater the risk a lender takes in making a loan, the higher the interest rate required.
The terms of agreement in a bond issue.
A bond issued with some form of collateral.
A bond backed only by the reputation of the issuer; also called a debenture bond.
Money that is invested in new or emerging companies that are perceived as having great profit potential.
raising needed funds through borrowing to increase a firms rate of return.
Cost of Capital
The rate of return a company must earn in order to meet the demands of its lenders and expectations of its equity holders.
Initial Public offering (IPO)
The first public offering of a corporation's stock.
Specialists who assist in the issue and sale of new securities.
Large organizations- such as pension funds, mutual funds, and insurance companies - that invest their own funds or the funds of others.
An organization whose members can buy and sell (exchange) securities for companies and individual investors.
Over-the-counter (OTC) Market
Exchange that provides a means to trade stocks not listed on the national exchanges.
A nationwide electronic system that links dealers accross the nation so that they can buy and sell securities electronically.
Securities and Exchange Commission (SEC)
Federal agency that has responsibility for regulating the various stock exchanges.
A condenced version of economic and financial information that a company must file with the SEC before issuing stock; the prospectus must be sent to prospective investors.
Shares of ownership in a company.
Evidence of stock ownership that specifies the name of the company, the number of shares it represents, and the type of stock being issued.
Part of a firm's profits that the firm may distribute to stockholders as either cash payments or additional shares of stock.
The most basic form of ownership in a firm; it confers voting rights and the right to share in the firm's profits through dividends, if approved by the firm's board of directors.
Stock that gives its owners preference in the payment of dividends and an earlier claim on assets than common stockholders if the company is forced out of business and its assets sold.
A corporate certificate indicating that a person has lent money to a firm of to the government.
The exact date the issuer of a bond must pay the principle to the bondholder.
The payment the issuer of the bond makes to the bondholders for use of the borrowers money.
Bonds that are unsecured, not backed up by any collateral such as equipment
A reserve account in which the issuer of a bond periodically retires some part of the bond principle prior to maturity so that enough capital will be accumulated by the maturity date to pay off the bond.
A registered representative who works as a market intermediary to buy and sell securities for clients
Buying several different investment alternatives to spread the risk of investing
the positive difference between the purchase price of a stcok and its sale price.
an action by a company that gives stockholders two or more shares of stock for each one they own.
buying stock on margin
purchasing stocks by borrowing some of the purchase cost from the brokerage firm.
an organization that buys stock and bonds and then sells shares in those securities to the public
high-risk, high-interest bonds
exchange-traded funds (ETFs)
collections of stocks and bonds that are traded on exchanges but are traded more like individual staocks than like mutual funds
Dow Jones industrial Average (the Dow)
the average cost of 30 selected industrial stocks, used to give an indication of the direction (up or down) of the stock market over time.