INTRODUCTION OF FINANCE

1. Role of finance in Business

1.1. Capital structure decision

1.2. Working capital Management

1.3. Study of how people and business evaluate investment and raise capital to fund them.

2. 5 FOUNDATIONAL PRINCIPLES OF FINANCE

2.1. CASH FLOW

2.1.1. Measured weath/value

2.1.2. Cash outflow (Paying money out)

2.1.3. Cash in flow (Reinvest correct)

2.2. MONEY HAS A TIME VALUE

2.2.1. It is better to receive money earlier rather than later.

2.2.2. Focus on the creation and measurement of value.

2.2.3. interest rate to use is determined by principle of the risk-return trade off.

2.3. RISK REQUIRES A REWARD

2.3.1. Investment alternatives have different amounts of risk and expected returns.

2.3.1.1. The higher will be its expected return.

2.4. MARKET PRICES ARE GENERALLY RIGHT

2.4.1. Investors respond to new information by buying and selling their investments.

2.5. CONFLICTS OF INTEREST CAUSE AGENCY PROBLEMS

2.5.1. Agency problem may interfere with the implementation of this goal.

2.5.1.1. personal goals ahead of the goals of shareholders.

3. MEANING

3.1. Management of money The application of finance is almost everywhere and inevetable.

4. Goal of the firm

4.1. Create value for the company's owner (Shareholder). Financial manager is to create wealth for shareholder by making decision

5. WHY STUDY FINANCE

5.1. Its basic for live (Personal anad Works included)

6. LEGAL FORM OF BUSINESS ORGANIZATION

6.1. Sole proprietorship

6.2. Partnership

6.3. Coorperation

6.3.1. Hybird S-Corporation

6.4. Hybri

6.4.1. LLC

6.4.2. S.Type