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4.01
Role of Finance
| Accounting | the process of keeping and interpreting financial records |
| accounts payable | all monies owed b the business to others |
| accounts receivable | all monies owed to a firm by its customers |
| acquisition of funds | finance activity involving making decisions about financing |
| administration of assets | finance activity involving making decisions about a firm's investments |
| assets | anything of value that a business or individual owns |
| capital budgeting | a process in which the firm financial managers determine which projects it should invest in |
| capital investment decisions | decisions that determine which projects a business will invest in, how the investments will be financed, and weather to pay dividends or shareholders |
| capital structure | a firm's mis of financing, usually some combination of debt and equity |
| cash conversion cycle | ratio that refers to the number of days between a company paying for raw materials and receiving cash from selling the products made from raw materials |
| debt funding | using money that is lent by a bank or other institution to finance a project |
| dividend | a sum of money paid to an investor or stockholder as earnings on an investment |
| equity funding | using the money from investors to finance a project in exchange for shares in the company |
| Finance | in business, the function that involves all money and money management matters |
| Financing | funding a business activity or project through debt, equity, or venture capital |
| return on capital | a measure of how well a business generates cash flow in relation to the capital it has already invested in itself |
| venture capital | invested money used for a new business opportunities |
| working capital management | management of a firm's current balance of assets and liabilities; involves accounts payable and receivable, inventory and cash |