本科會計專業(yè)英語chapter 12教學(xué)課件

1、YCF正版可修改PPT(本科）會計專業(yè)英語chapter 12教學(xué)課件Chapter 12 Introduction to Financial Management 2Learning ObjectivesExplain the nature and purpose of financial management.Interpret the relationship between financial objectives, corporate objectives and corporate strategy.Identify and describe a variety of financ

2、ial objectives.Understand different financial instruments and financial markets.Explain and apply the value for money.3Mini CaseM&K Co. is “a leading global provider of ingredients and solutions to the food, beverage and other industries”. Their corporate strategy is as follows.“Our vision is to bec

3、ome the leading global provider of specialty food ingredients and solutions. Over the last three years we have been taking a number of steps to realize this vision through our business transformation programme. The first part of the transformation, which is now complete, was about realigning and foc

4、using our resources on growing our Specialty Food Ingredients business unit.The second part is about getting the right enabling platform in place. We have made good progress including the move to a new operating model comprising two global business units, implementing a global Shared Service Centre

5、and the initial roll-out of our global IS/IT system.”Identify:What are the general financial objectivities and non-financial objectivities of a company?4ContentTopic 1: An overview of Financial ManagementTopic 2: Financial Instruments and MarketsTopic 3: Value for Money5Topic 1: An overview of Finan

6、cial Management1. Nature of Financial ManagementFinancial management can be defined as the management of the finances of an organization in order to achieve the financial objectives of the organization. The usual assumption in financial management for the private sector is that the objective of the

7、company is to maximize shareholders wealth.6Topic 1: An overview of Financial Management2. Financial PlanningThe financial manager will need to plan to ensure that enough funding is available at the right time to meet the needs of the organization for short, medium and long-term capital.(1) In the s

8、hort term, funds may be needed to pay for purchases of inventory, or to smooth out changes in receivables, payables and cash: the financial manager must ensure that working capital requirements (ie, requirements for day to day operations) are met.(2) In the medium or long term, the organization may

9、have planned purchases of non-current assets, such as plant and equipment, for which the financial manager must ensure that funding is available.7Topic 1: An overview of Financial Management3. Financial Management DecisionsThe financial manager makes decisions relating to investment, financing and d

10、ividends. The management of risk must also be considered.Exhibit 12-1 displays examples of different types of investment decision.8Topic 1: An overview of Financial ManagementExhibit 12-1 Examples of Different Types of Investment DecisionDecisions internal to thebusiness enterpriseWhether to underta

11、ke new projectsWhether to invest in new plant and machineryResearch and development decisionsInvestment in a marketing or advertising campaignDecisions involvingexternal partiesWhether to carry out a takeover or a merger involving another businessWhether to engage in a joint venture with another ent

12、erpriseDisinvestment decisions Whether to sell off unprofitable segments of the businessWhether to sell old or surplus plant and machineryThe sale of subsidiary companies9Topic 1: An overview of Financial Management4. Management accounting, financial accounting and financial managementExhibit 12-2 F

13、inancial Accounts and Management AccountsFinancial AccountsManagement AccountsThe format of published financial accounts is determined by law and by accounting standards.In principle the accounts of different organizations can therefore be easily compared.The format of management accounts is entirel

14、y at management discretion: no strict rules govern the way they are prepared or presented.Financial accounts concentrate on the business as a whole, aggregating revenues and costs from different operations, and are an end in themselves.Management accounts can focus on specific areas of an organizati

15、ons activities. Information may aid a decision rather than be an end product of a decision.Most financial accounting information is of a monetary nature.Management accounts incorporate non-monetary measures.Financial accounts present an essentially historic picture of past operations.Management acco

16、unts are both a historical record and a future planning tool.10Topic 1: An overview of Financial Management5. Financial Objectives and the Relationship with Corporate Strategy(1) Corporate objectivesCorporate objectives are those which are concerned with the firm as a whole. Objectives should be exp

17、licit, quantifiable and capable of being achieved. The corporate objectives outline the expectations of the firm and the strategic planning process is concerned with the means of achieving the objectives.11Topic 1: An overview of Financial ManagementObjectives should relate to the key factors for bu

18、sinesssuccess, which are typically as follows.Profitability (return on investment)Market shareGrowthCash flowCustomer satisfactionThe quality of the firms productsIndustrial relationsAdded value12Topic 1: An overview of Financial Management(2) Financial objectivesFinancial targets may include target

19、s for: earnings; earnings per share; dividend per share; gearing level; profit retention; operating profitability.The usual assumption in financial management for the private sector is that the primary financial objective of the company is to maximize shareholders wealth.Shareholder wealth maximizat

20、ionProfit maximizationEarnings per share growthOther financial targets13Topic 1: An overview of Financial Management6. Non-financial ObjectivesA company may have important non-financial objectives which must be satisfied in order to ensure the continuing participation of all stakeholders. Examples o

21、f non-financial objectives are as follows.(1) The welfare of employees(2) The welfare of management(3) The provision of a service(4) The fulfillment of responsibilities towards customers(5) The fulfillment of responsibilities towards suppliers(6) The welfare of society as a whole14Topic 2: Financial

22、 Instruments and Markets1. Financial Instruments(1) BondsA bond, like any other form of indebtedness, is a fixed-income security. The holder receives a specified annual interest income and a specified amount at maturity, no more or no less (unless the company goes bankrupt). (2) Call ProvisionsVirtu

23、ally all corporate bonds contain a clause giving the issuing company the option to retire the bonds prior to maturity. Frequently the call price for early retirement will be at a modest premium above par or the bond may have a delayed call, meaning the issuer may not call the bond until it has been

24、outstanding for a specified period, usually 5 or 10 years.15Topic 2: Financial Instruments and Markets(3) CovenantsTypical covenants include a lower limit on the companys current ratio, an upper limit on its debt-to-equity ratio and perhaps a requirement that the company not acquire or sell major as

25、sets without prior creditor approval.(4) Rights in LiquidationThe distribution of liquidation proceeds in bankruptcy is determined by what is known as the rights of absolute priority. First in line are, naturally the government for past-due taxes and the bankruptcy lawyers who wrote the law. Among i

26、nvestors, the first to be repaid are senior creditors, then general creditors, and finally subordinated creditors.16Topic 2: Financial Instruments and Markets(5) Secured CreditorsA secured credit is a form of senior credit in which the loan is collateralized by a specific company asset or group of a

27、ssets. In liquidation, proceeds from the sale of this asset go only to the secured creditor.(6) Bonds as an InvestmentFor many years, investors thought bonds to be very safe investments. After all, interest income is specified and the chances of bankruptcy are remote. However, this reasoning ignored

28、 the bad effects of inflation on fixed-income securities.17Topic 2: Financial Instruments and Markets(7) Bond RatingsA bond rating is a letter grade, such as AA, assigned to an issue that reflects the analysts appraisal of the bonds default risk. Analysts determine these ratings using many technique

29、s, including analysis of the companys balance sheet debt ratios and its coverage ratios relative to competitors.(8) Junk BondsA companys bond rating is important because it affects the interest rate the company must offer. Moreover, many institutional investors are prohibited from investing in bond

30、that are rated less than “investment” grade, usually defined as BBB, and above. As a result, there have been periods in the past when companies with lower-rated bonds had great difficulty raising debt in public markets. Below-investment-grade bonds are known variously as speculative, high-yield, or

31、simply junk bonds.18Topic 2: Financial Instruments and Markets(9) Common StockCommon stock is a residual income security. The stockholder has a claim on any income remaining after the payment of all obligations, including interest on debt.(10) Shareholder Control At least in theory, stockholders exe

32、rcise control over company affairs through their ability to elect the board of directors. However, the wide distribution of share ownership and the laws governing election of the board have frequently combined to greatly reduce this authority, although the winds of change may be blowing. 19Topic 2:

33、Financial Instruments and Markets(11) Preferred StockPreferred stock is a hybrid security, like debt in some ways, but like equity in others. Like debt, preferred stock is a fixed-income security. It promises the investor an annual fixed dividend equal to the securitys coupon rate times its par valu

34、e. (12) Cumulative PreferredCompany boards of directors have two strong incentives to pay preferred dividends. One is that preferred shareholders have priority over common shareholders with respect to dividend payments. Common shareholders receive no dividends unless preferred holders are paid in fu

35、ll. Second, virtually all preferred stocks are cumulative. If a firm does not pay a preferred dividend on time, the arrearage accumulates and must be paid in firm before the company can resume common dividend payments.20Topic 2: Financial Instruments and Markets2. Financial Markets(1) Private Placem

36、ent or Public Issue?Companies raise money in two broad ways through private negotiations with banks, insurance companies, pension funds, and other financial institutions, or by selling securities to the public. The former is known as a private placement the latter is a public issue. 21Topic 2: Finan

37、cial Instruments and Markets(2) Exchanges and Over-the-Counter MarketsPublic issues trade on two types of markets: organized exchanges and over-the-counter markets. Organized exchanges are centralized trading locations that maintain active markets in hundreds of stocks and bonds. Over-the-counter (O

38、TC) markets are much more informal. Any brokerage house anywhere in the country can create an OTC market for a stock or a bond by quoting a bid price at which it will buy the security and a higher asking price at which it will sell it. 22Topic 2: Financial Instruments and Markets(3) International Financial MarketsFrom a global perspective, companies can raise money on any of three types of markets domestic, foreign, or international.23Topic 3: Value for Money1. Introduction to Present ValuePresent value (PV) =C1