Page 467 - Introduction to Business

Finance

ou need money to buy and sell goods and CHAPTER 13
Yservices, save for large purchases, invest for Financial Management of the Firm
retirement in old age, and give to worthy and Investment Management IVE
charitable causes. While you use money every
day, how much do you really know about it? Who
makes it? How is it controlled in the country? How CHAPTER 14
do businesses use it to invest in the production of Understanding the Financial
their products? What role do banks and other System, Money, and Banking PART F
financial institutions play? What kinds of financial
instruments are available to you for investment?
Is there a risk that you could lose your money CHAPTER 15
when you invest in different financial Personal Financial Planning
instruments? Can time change the value of
money? These and many other questions are
related to the study of finance.
Finance is applicable to all areas of business
enterprise—an advertising campaign in
marketing, the equipment needed to assemble a Chapter 14 looks at the bigger picture of the
product, the wages that should be paid to financial system as a whole. The financial system
employees, legal matters of intellectual property comprises financial markets, institutions, and
rights, and the application of accounting data to instruments. Government plays an important
business decisions. Whenever money is involved role in financial systems through monetary
in a business, government, or personal decision, policy and regulation. On the one hand, finance
principles of finance apply. is an international subject of keen interest to
We divide our discussion of finance into the countries all around the world. On the other
perspective of the firm or individual—microlevel, hand, financial systems affect the lives of
and of the economy—macrolevel. Chapter 13 individuals and the success of business firms in
covers the financial management of the firm, all those countries.
including investing in individual firms. Here we Chapter 15 covers important principles of
consider how companies both raise funds for personal financial planning. You should begin
investment and evaluate how best to invest financial planning as early as possible in your
those funds. For private firms owned by career. Financial planning involves gathering all
stockholders, the goal of financial managers is to your financial and personal data, analyzing that
maximize the value of their common stock or data, and creating a financial plan for the future.
equity. Investors that purchase the debt and Periodically, you need to review the plan and
equity of firms seek to evaluate how well make necessary changes as your environment
financial managers are performing their duties. and financial conditions change. This chapter
Investors want to know not only how much they provides information to assist you right now as a
might earn on debt and equity securities but also college student and to help you plan for future
how much risk they are taking. years.
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