Financial Terms Finance for Business FIN 370 Financial Terms •Finance (D) Finance refers to money management by individuals, companies, and government. (R) Finance’s role in the business world is to maximize profits, evaluate investments in order to raise funds with as little risk as possible, which is possible if information is adequately interpreted. • Efficient market (D) The standards to which stock prices reflect all available and relevant information. (R) To assist in explaining
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CASH MANAGEMENT Cash is often called liquid assets or nonearning assets. It is needed to pay salaries, raw materials, repayment of loan and others. Specifically there are 3 major motives of holding cash which are: |Transaction motives |The level of funds required due to the ordinary course of business | | |It is needed to meet ordinary payment such as paying bills, employees’ salaries, creditors and etc
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HSA 525-Health Financial Management Assignment # 4 – Medical Associates November 27, 2011 Medical Associates: Equity cost of capital, DCF, CAPM, risk, capital budgeting Medical Associates is a large for-profit group practice. Its dividends are expected to grow at a constant rate of 7% per year into the foreseeable future. The firm's last dividend (D0) was $2, and its current stock price is $23. The firm's beta coefficient is 1.6; the rate of return on 20-year T-bonds currently is 9%; the
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[pic] Jacobs Division 2003 Richard Soderberg, financial analyst for the Jacobs Division of MacFadden Chemical Company, was reviewing several complex issues relating to possible investment in a new product for the following year, 2004. The product was a specialty coating material, which qualified for investment according to company guidelines. Mr. Reynolds, however, the Jacobs Division manager, was fearful that it might be too risky. While regarding the project as an attractive
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9.21% | | Management Effectiveness | Return on Assets (ttm): | 9.61% | Return on Equity (ttm): | 20.04% | | Income Statement | Revenue (ttm): | 69.51B | Revenue Per Share (ttm): | 43.87 | Qtrly Revenue Growth (yoy): | 4.40% | Gross Profit (ttm): | 23.30B | EBITDA (ttm)6: | 8.09B | Net Income Avl to Common (ttm): | 3.70B | Diluted EPS (ttm): | 2.32 | Qtrly Earnings Growth (yoy): | 12.00% | | Balance Sheet | Total Cash (mrq): | 2.23B | Total Cash Per Share (mrq):
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2. How should the firm raise money to fund these investments?The firm’s funding choices are generally referred to as capital structure decisions. 3. How can the firm best manage its cash flows as they arise in its day-to-day operations?This area of finance is generally referred to as working capital management. The principle of finance is the following: Principle 1: Money Has a Time Value A dollar received today is worth more than a dollar received in the future. Conversely, a dollar received
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Financial Terms and Roles Create a list of definitions for the following terms and identify their roles in finance: * Finance – Finance is the source through which a resource is provided. For example, cash is a resource, and where the cash comes from is the source. * Efficient market – A market where the values of all securities at any given time reflect all of the current available information, which results in the market value and intrinsic value being the same. * Primary market
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movies gave the company more creditability of making good movies than from budgets projections. The company producing 3-D movies will be a great advantage of staying ahead of all the competitors in the near future. “Whatever its financial and management travails, DreamWorks has succeeded in being different from the majors, and in working hard to discover and launch artists; in effect, putting art
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Policy Analysis Payout policy, or the means by which cash is returned to shareholders via cash dividends or share repurchases, is of critical concern for financial managers because of disagreements between management, investors, and financial academia on optimal policy. Payout policy decisions are often based upon key factors such as industry trends and behavior, decisions of benchmark competitors, and the predictability of future cash flows and sustainability. Linear Technology uses regular quarterly
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LO1 Understand the sources of finance available to a Business Finance is the most vital thing to run the business. Companies operating as commercial entities must have sufficient cash balances to facilitate their smooth operations. Cash requirement can be raised from different sources, ranging from equity, various forms of debt, to internally generated funds through retained earnings which would otherwise be distributed to shareholders (Myers and Myers, 1991; J. Gitman, 1991). The sources of finance
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