1、Fundamentals of Financial Management Eleventh EditionSlides by Wu XiaolanCopyright 2001 Prentice-Hall,Inc.Fundamentals of Financial Management,11/e by Van Horne and Wachowicz.Slides prepared by Wu Xiaolan1Course objective The Objective of this course is to introduce the student to both the theory an
2、d the practice of corporate finance and investment.For students intending to do further work in Finance,this course will lay the basic foundation of concepts used in advanced courses.Copyright 2001 Prentice-Hall,Inc.Fundamentals of Financial Management,11/e by Van Horne and Wachowicz.Slides prepared
3、 by Wu Xiaolan2Outline of the TextPart I:Introduction to Financial ManagementPart II:Valuation Part III:Tools of Financial Analysis and PlanningPart IV:Working Capital ManagementPart V:Investment in Capital AssetsPart VI:The Cost of Capital,Capital Structure,and Dividend PolicyPart VII:Intermediate
4、and Long-term FinancingCopyright 2001 Prentice-Hall,Inc.Fundamentals of Financial Management,11/e by Van Horne and Wachowicz.Slides prepared by Wu Xiaolan3Books of ReferencelArthur J.Keown,David F.Scott,John D.Martin,Jay William Petty,朱武祥译，现代财务管理基础，北京：清华大学出版社，1997年。（国外工商管理硕士（MBA）优秀教材译丛）lStephen A.Ro
5、ss,Randolph W.Westerfield,Jeffrey F.Jaffe,吴世农、沈艺峰等译，公司理财（第5版），北京：机械工业出版社，2000年。l夏新平，公司财务管理，武汉：华中理工大学出版社，1995年。l王化成，企业财务学，北京：中国人民大学出版社，1994年。Copyright 2001 Prentice-Hall,Inc.Fundamentals of Financial Management,11/e by Van Horne and Wachowicz.Slides prepared by Wu Xiaolan4EvaluationlPerformance in Cl
6、asses 10%lAssignments 20%lFinal Examination 70%100%Copyright 2001 Prentice-Hall,Inc.Fundamentals of Financial Management,11/e by Van Horne and Wachowicz.Slides prepared by Wu Xiaolan5Chapter 1Copyright 2001 Prentice-Hall,Inc.Fundamentals of Financial Management,11/e by Van Horne and Wachowicz.Slides
7、 prepared by Wu Xiaolan6Chapter ObjectiveslUnderstand what financial management is.lOutline the possible goals of a firm and the problems associated with each.lExplain the agency problem.lOutline the organization of the financial management function.Copyright 2001 Prentice-Hall,Inc.Fundamentals of F
8、inancial Management,11/e by Van Horne and Wachowicz.Slides prepared by Wu Xiaolan7What is Financial Management?lCorporate finance attempts to find the answers to the following questions:What investments（投资）should the firm take on?THE INVESTMENT DECISIONHow can cash be raised for the required investm
9、ents?THE FINANCING DECISIONShould existing assets be managed?ASSET MANAGEMENT DECISION Copyright 2001 Prentice-Hall,Inc.Fundamentals of Financial Management,11/e by Van Horne and Wachowicz.Slides prepared by Wu Xiaolan8Investment DecisionslWhat is the optimal firm size?lWhat specific assets should b
10、e acquired?lWhat assets(if any)should be reduced or eliminated?Most important of the three decisions.Copyright 2001 Prentice-Hall,Inc.Fundamentals of Financial Management,11/e by Van Horne and Wachowicz.Slides prepared by Wu Xiaolan9Financing DecisionslWhat is the best type of financing?lWhat is the
11、 best financing mix资金组合?lWhat is the best dividend policy股息分配方针?lHow will the funds be physically acquired?Determine how the assets（资产）（资产）(LHS of balance sheet)will be financed(RHS of balance sheet).Copyright 2001 Prentice-Hall,Inc.Fundamentals of Financial Management,11/e by Van Horne and Wachowic
12、z.Slides prepared by Wu Xiaolan10Asset Management DecisionslHow do we manage existing assets efficiently（有效地）?lFinancial Manager has varying degrees of operating responsibility over assets.lGreater emphasis（着重）on current asset management than fixed asset management.Copyright 2001 Prentice-Hall,Inc.F
13、undamentals of Financial Management,11/e by Van Horne and Wachowicz.Slides prepared by Wu Xiaolan11What is the Goal of the Firm?Maximization of Shareholder Wealth!（股东财富最大化）Value creation occurs when we maximize the share price for current shareholders.Copyright 2001 Prentice-Hall,Inc.Fundamentals of
14、 Financial Management,11/e by Van Horne and Wachowicz.Slides prepared by Wu Xiaolan12Possible GoalslThe objective of decision making in corporate finance(publicly-traded firm)is (a)to maximize earnings 利润最大化 (b)to maximize cash flows (c)to maximize the size of the firm (d)to maximize market share（市场
15、占有率）(e)to maximize firm value (f)to maximize stock（股票）prices.Copyright 2001 Prentice-Hall,Inc.Fundamentals of Financial Management,11/e by Van Horne and Wachowicz.Slides prepared by Wu Xiaolan13Possible GoalslThe goal must be associated with increasing profitability利益率 and reducing risk.lIt is neces
16、sary to find a goal that can encompass包含 both profitability and risk.Copyright 2001 Prentice-Hall,Inc.Fundamentals of Financial Management,11/e by Van Horne and Wachowicz.Slides prepared by Wu Xiaolan14Profit MaximizationlCould increase current profits while harming firm(e.g.,defer maintenance,issue
17、 common stock to buy T-bills,etc.).lIgnores changes in the risk level of the firm.uMaximizing a firms earnings after taxes.ProblemsCopyright 2001 Prentice-Hall,Inc.Fundamentals of Financial Management,11/e by Van Horne and Wachowicz.Slides prepared by Wu Xiaolan15Earnings per Share MaximizationlDoes
18、 not specify指定的 timing or duration持续的 of expected returns.lIgnores changes in the risk level of the firm.lCalls for a zero payout dividend policy股息分配方针.uMaximizing earnings after taxes divided by shares outstanding流通在流通在外的股票外的股票.ProblemsCopyright 2001 Prentice-Hall,Inc.Fundamentals of Financial Mana
19、gement,11/e by Van Horne and Wachowicz.Slides prepared by Wu Xiaolan16Strengths of Shareholder Wealth Maximization股东财富最大化的优势lTakes account of承担:current and future profits and EPS每股收益;the timing,duration,and risk of profits and EPS;dividend policy;and all other relevant有关的 factors.lThus,share price s
20、erves as a barometer显示变化的事物 for business performance企业绩效.Copyright 2001 Prentice-Hall,Inc.Fundamentals of Financial Management,11/e by Van Horne and Wachowicz.Slides prepared by Wu Xiaolan17Social ResponsibilitylWealth maximization does not preclude 妨碍the firm from being socially responsible.lThe cr
21、iteria标准 for social responsibility are not clearly defined.lAssume we view the firm as producing both private and social goods.lThen shareholder wealth maximizationremains the appropriate适当的 goal in governing统治 the firm.Copyright 2001 Prentice-Hall,Inc.Fundamentals of Financial Management,11/e by Va
22、n Horne and Wachowicz.Slides prepared by Wu Xiaolan18Agency TheorylAgency Theory is a branch of economics relating to the behavior of principals（委托人）and their agents（代理人）.lJensen and Meckling developed a theory of the firm based on agency theory(代理理论).Copyright 2001 Prentice-Hall,Inc.Fundamentals of
23、 Financial Management,11/e by Van Horne and Wachowicz.Slides prepared by Wu Xiaolan19Separation of Ownership and Control所有权与管理权的分离Board of Directors董事会ManagementAssetsDebtEquity权益ShareholdersDebtholders持债人Copyright 2001 Prentice-Hall,Inc.Fundamentals of Financial Management,11/e by Van Horne and Wac
24、howicz.Slides prepared by Wu Xiaolan20Role of ManagementlManagement acts as an agent for the owners(shareholders)of the firm.lAn agent is an individual authorized个人授权 by another person,called the principal,to act in扮演 the latters behalf代表.Copyright 2001 Prentice-Hall,Inc.Fundamentals of Financial Ma
25、nagement,11/e by Van Horne and Wachowicz.Slides prepared by Wu Xiaolan21Agency RelationshipslThe agency relationship is the relationship between shareholders(owners)and management of a firm.lThe agency problem suggest a possibility of conflict of interests利益冲突 between these two parties.lAgency costs
26、 refer to the direct and indirect costs arising from this conflict of interest.Copyright 2001 Prentice-Hall,Inc.Fundamentals of Financial Management,11/e by Van Horne and Wachowicz.Slides prepared by Wu Xiaolan22Agency CostslThere are two types of costs associated相关的 with the agency problem:Direct a
27、gency costs are the loss in shareholder wealth due to managerial misconduct管理的不端行为.Indirect agency costs are the costs of avoiding the agency problem.Copyright 2001 Prentice-Hall,Inc.Fundamentals of Financial Management,11/e by Van Horne and Wachowicz.Slides prepared by Wu Xiaolan23Do Managers Act i
28、n Shareholders Interests?The answer to this will depend on two factors:lhow closely management goals are aligned对准 with shareholder goals;andlthe ease with which management can be replaced if it does not act in shareholders best interests.Copyright 2001 Prentice-Hall,Inc.Fundamentals of Financial Ma
29、nagement,11/e by Van Horne and Wachowicz.Slides prepared by Wu Xiaolan24Alignment of Goals校准目标The conflict of interests is limited due to:Monitoring监督 of management;management compensation schemes管理补偿方案;andthe threat of takeover收购的威胁.Copyright 2001 Prentice-Hall,Inc.Fundamentals of Financial Managem
30、ent,11/e by Van Horne and Wachowicz.Slides prepared by Wu Xiaolan25Do Shareholders ControlManagerial Behavior?lShareholders vote for the board of directors董事会,who in turn hire雇佣 the management team.lContracts合同 can be carefully constructed构造 to be incentive compatible相容性.lThere is a market for manag
31、erial talentthis may provide market discipline市场约束 to the managersthey can be replaced.lIf the managers fail to maximize share price,they may be replaced in a hostile takeover恶性接收/敌意接管.Copyright 2001 Prentice-Hall,Inc.Fundamentals of Financial Management,11/e by Van Horne and Wachowicz.Slides prepar
32、ed by Wu Xiaolan26Agency TheoryIncentives include stock options职工职工优先认股权优先认股权perquisites津贴津贴andbonuses奖金奖金.lPrincipals负责人 must provide incentives奖励措施so that management acts in the principals best interests and then monitor监控 results.Copyright 2001 Prentice-Hall,Inc.Fundamentals of Financial Manageme
33、nt,11/e by Van Horne and Wachowicz.Slides prepared by Wu Xiaolan27Financial ManagerlThe top financial manager within a firm is usually the Chief Financial Officer(CFO)财务总监 Treasurer出纳 oversees 监督cash management,credit management信贷管理,capital expenditures资本支出 and financial planning财务策划 Controller主计长 o
34、versees taxes,cost accounting成本会计,financial accounting财务会计 and data processing数据处理1.4Copyright 2001 Prentice-Hall,Inc.Fundamentals of Financial Management,11/e by Van Horne and Wachowicz.Slides prepared by Wu Xiaolan28FinancialManagerInvestors(1)Cash raised from investors投资者(1)(2)Cash invested in firm(2)(3)Cash generated by operations营业所得(3)(4a)Cash reinvested再投资(4a)(4b)Cash returned to investors(4b)The Role of The Financial ManagerFirmsoperationsReal assets
