1、1-1 Pearson Education Limited 2004Fundamentals of Financial Management,12/eCreated by:Gregory A.Kuhlemeyer,Ph.D.Carroll College,Waukesha,WI第1页，共25页。1-2uExplain why the role of the financial manager today is so important.uDescribe financial management in terms of the three major decision areas that c
2、onfront the financial manager.uIdentify the goal of the firm and understand why shareholders wealth maximization is preferred over other goals.uUnderstand the potential problems arising when management of the corporation and ownership are separated(i.e.,agency problems).uDemonstrate an understanding
3、 of corporate governance.uDiscuss the issues underlying social responsibility of the firm.uUnderstand the basic responsibilities of financial managers and the differences between a treasurer and a controller.第2页，共25页。1-3What is Financial Management?The Goal of the FirmCorporate GovernanceOrganizatio
4、n of the Financial Management Function第3页，共25页。1-4Concerns the acquisition,financing,and management of assets with some in mind.第4页，共25页。1-5What is the optimal firm size?What specific assets should be acquired?What assets(if any)should be reduced or eliminated?第5页，共25页。1-6What is the best type of fi
5、nancing?What is the best financing mix?What is the best dividend policy(e.g.,dividend-payout ratio)?How will the funds be physically acquired?第6页，共25页。1-7How do we manage existing assets efficiently?Financial Manager has varying degrees of operating responsibility over assets.Greater emphasis on cur
6、rent asset management than fixed asset management.第7页，共25页。1-8Value creation occurs when we maximize the share price for current shareholders.第8页，共25页。1-9Could increase current profits while harming firm(e.g.,defer maintenance,issue common stock to buy T-bills,etc.).Ignores changes in the risk level
7、 of the firm.uMaximizing a firms earnings after taxes.第9页，共25页。1-10Does not specify timing or duration of expected returns.Ignores changes in the risk level of the firm.Calls for a zero payout dividend policy.uMaximizing earnings after taxes divided by shares outstanding.第10页，共25页。1-11Takes account
8、of:;and all other relevant factors.Thus,serves as a barometer for business performance.第11页，共25页。1-12Cadbury Schweppes:“governing objective is growth in shareowner value”Credit Suisse Group:“achieve high customer satisfaction,maximize shareholder value and be an employer of choice”Dow Chemical Compa
9、ny:“maximize long-term shareholder value”ExxonMobil:“long-term,sustainable shareholder value”*Refer to text for additional details第12页，共25页。1-13There exists a SEPARATION between owners and managers.Modern CorporationShareholdersManagement第13页，共25页。1-14An is an individual authorized by another person
10、,called the principal,to act in the latters behalf.Management acts as an for the owners(shareholders)of the firm.第14页，共25页。1-15is a branch of economics relating to the behavior of principals and their agents.uJensen and Meckling developed a theory of the firm based on.第15页，共25页。1-16Incentives includ
11、e,and.uPrincipals must provide so that management acts in the principals best interests and then results.第16页，共25页。1-17Wealth maximization does not preclude the firm from being.Assume we view the firm as producing both private and social goods.Then remains the appropriate goal in governing the firm.
12、第17页，共25页。1-18Corporate governance:represents the system by which corporations are managed and controlled.Includes shareholders,board of directors,and senior management.Then remains the appropriate goal in governing the firm.第18页，共25页。1-19Typical responsibilities:Set company-wide policy;Advise the C
13、EO and other senior executives;Hire,fire,and set the compensation of the CEO;Review and approve strategy,significant investments,and acquisitions;andOversee operating plans,capital budgets,and financial reports to common shareholders.CEO/Chairman roles commonly same person in US,but separate in Brit
14、ain(US moving this direction).第19页，共25页。1-20Sarbanes-Oxley Act of 2002(SOX):addresses corporate governance,auditing and accounting,executive compensation,and enhanced and timely disclosure of corporate informationImposes new penalties for violations of securities lawsEstablished the Public Company A
15、ccounting Oversight Board(PCAOB)to adopt auditing,quality control,ethics,disclosure standards for public companies and their auditors,and policing authorityGenerally increasing the standards for corporate governance第20页，共25页。1-21Board of DirectorsPresident(Chief Executive Officer)Vice PresidentOpera
16、tionsVice PresidentMarketingVP ofFinance第21页，共25页。1-22TreasurerCapital BudgetingCash ManagementCredit ManagementDividend DisbursementFin Analysis/PlanningPension ManagementInsurance/Risk MngmtTax Analysis/PlanningVP of FinanceControllerCost AccountingCost ManagementData ProcessingGeneral LedgerGover
17、nment ReportingInternal ControlPreparing Fin StmtsPreparing BudgetsPreparing Forecasts第22页，共25页。1-23Integrated throughout the ChaptersA Useful Financial ToolDoes NOT replace financial understanding第23页，共25页。1-24Change the decimal places displayed from“2”to“Floating”Press:2nd Format 9ENTER2nd QUIT第24页，共25页。1-25Change the periods per year from“12”to“1”Press:2nd P/Y 1ENTER2nd QUIT第25页，共25页。
