part2busfin

The process of managing a company's finances, including making investment decisions, raising capital, and managing cash flow.

A company's structure, showing the different levels of authority and responsibility.

Individuals who own a portion of a company through shares of stock.

The highest governing body of a corporation, responsible for setting strategy and overseeing management.

The chief executive officer of a company, responsible for overall operations and strategy implementation.

The department responsible for generating sales and marketing strategies to promote the company's products or services.

The process of planning and managing how money is used and raised within a company.

The time it takes for a company to convert its raw materials into cash from sales.

A business decision focused on generating the greatest value for the company's owners (shareholders) by optimizing the use of resources and investments.

Making choices about how to fund the long-term growth and activities of the business, such as expanding operations or acquiring new assets.

Decisions related to acquiring and utilizing resources like land, equipment, and technology to achieve long-term objectives.

Managing the day-to-day operations of the company by ensuring sufficient cash flow is available to cover short-term obligations, such as paying rent, utilities, and supplier invoices.

Money sourced from within the company itself, such as profits, savings, or the sale of unused assets. This does not increase the company's debt.

A financial intermediary that links depositors with borrowers, pooling savings from many depositors and extending credit to individuals and businesses.

Financial markets where long-term securities, like stocks, are bought and sold.

A financial instrument that represents a financial asset or liability, such as a stock, bond, or derivative.

Deposit-taking institutions that extend credit to consumers, especially in rural areas.

Deposit-taking institutions that primarily extend credit to individuals and businesses in the retail and consumer market.

Individuals who deposit funds into a bank, hoping to earn interest.

Individuals or businesses that borrow money from a bank, often to purchase goods or services.

They provide financial services to businesses, including managing and raising capital, handling cash flow, and achieving financial objectives.

Funds available for a short period of time, typically less than a year. Used for short-term cash flow needs.

Funds available for a longer period of time, typically more than a year. Used for long-term investments and projects.

They are non-bank financial institutions that provide loans to large corporations and governments. They raise funds through bond issuances and initial public offerings.

They are non-bank financial institutions that extend financing to companies needing funds for their operations. They are not banks, but they provide financing solutions.

A type of security that represents ownership in a corporation. Stockholders have a claim on the corporation's assets and earnings.

A type of long-term debt security issued by governments or corporations. They promise to pay a fixed interest rate to the bondholder for a specific period.

A type of long-term debt instrument with a maturity longer than a money market instrument. It can be used for a variety of purposes, including financing projects and acquisitions.

Financial institutions that accept deposits and offer loans to individuals or entities.

Businesses that offer banking services like loans, but they cannot accept deposits because they don't have a banking license.

Information that helps assess a borrower's creditworthiness and ability to repay a loan.

Assets pledged as security for a loan, which the lender can claim if the borrower defaults.

An evaluation of a borrower's credit history and the value of their collateral.

Financial protection against potential losses, such as damage to property or loss of income.

Documents like land titles, tax declarations, and special powers of attorney, used to support a loan application.

Application forms, identification documents, credit information, collateral files, and credit investigations.

The period from when a company purchases raw materials to when it receives payment from customers.

Evaluating and adjusting the company's operating strategy to meet financial objectives. This usually involves examining budgets, financial statements, and performance data.

Financial planning involves aligning a company's financial actions with its goals by creating long-term and short-term plans. It includes strategies like raising capital, investing, and managing cash flow.

A contingency plan is designed to mitigate potential risks and setbacks that could negatively impact the company's financial performance.

The long-term financial plan, which is also called the strategic financial plan, covers a period of 2 to 10 years. It involves setting the big picture financial goals and strategies for the company.

A short-term financial plan, also known as an operating financial plan, covers a period of one year or less. It focuses on managing day-to-day operations and ensuring efficient and effective use of finances.

Financial planning is crucial because it helps management assess the financial impact of their strategies and identify any potential financing needs. They can then make adjustments to ensure financial stability and achieve their goals.

By using a financial plan, managers can monitor the company's progress towards its goals and make necessary modifications to ensure continued success. This process involves continuous evaluation and adjustment based on actual performance and market conditions.