Chapter 16 - Financial management and securities markets. Learning objectives of this chapter include: Define current assets and describe some common methods of managing them, identify some sources of short-term financing (current liabilities), summarize the importance of long-term assets and capital budgeting, specify how companies finance their operations and fixed assets with long-term liabilities, particularly bonds,. | Part 6 Financing the Enterprise © 2015 McGraw-Hill Education. 1 CHAPTER 14 Accounting and Financial Statements CHAPTER 15 Money and the Financial System CHAPTER 16 Financial Management and Securities Markets 16-2 2 Learning Objectives LO 16-1 Describe some common methods of managing current assets. LO 16-2 Identify some sources of short-term financing (current liabilities). LO 16-3 Summarize the importance of long-term assets and capital budgeting. LO 16-4 Specify how companies finance their operations and manage fixed assets with long-term liabilities, particularly bonds. LO 16-5 Discuss how corporations can use equity financing by issuing stock through an investment banker. LO 16-6 Describe the various securities markets in the United States. 16-3 3 Managing Current Assets 16-4 4 Managing Current Assets 16-5 Sometimes cash comes in faster than needed to pay bills T-bills are considered risk free 5 16-6 Managing Current Assets 6 Managing Current Liabilities 16-7 Averting a cash . | Part 6 Financing the Enterprise © 2015 McGraw-Hill Education. 1 CHAPTER 14 Accounting and Financial Statements CHAPTER 15 Money and the Financial System CHAPTER 16 Financial Management and Securities Markets 16-2 2 Learning Objectives LO 16-1 Describe some common methods of managing current assets. LO 16-2 Identify some sources of short-term financing (current liabilities). LO 16-3 Summarize the importance of long-term assets and capital budgeting. LO 16-4 Specify how companies finance their operations and manage fixed assets with long-term liabilities, particularly bonds. LO 16-5 Discuss how corporations can use equity financing by issuing stock through an investment banker. LO 16-6 Describe the various securities markets in the United States. 16-3 3 Managing Current Assets 16-4 4 Managing Current Assets 16-5 Sometimes cash comes in faster than needed to pay bills T-bills are considered risk free 5 16-6 Managing Current Assets 6 Managing Current Liabilities 16-7 Averting a cash shortfall with short-term funds Most suppliers offer discounts for early payment, offered as “1/10 net 30,” meaning a 1% discount if given is paid in 10 days and the full amount is due in 30 days 7 Managing Current Liabilities 16-8 8 Managing Fixed Assets 16-9 9 Assessing Risk 16-10 Highest Risk Lowest Risk 10 Financing with Long-Term Liabilities 16-11 Two common sources for long-term funds: Attracting new owners (equity financing) Long-term liabilities (debt financing) 11 Types of Bonds 16-12 12 Financing with Owners’ Equity 16-13 Corporate owners own shares of the company and stockholders’ equity includes common stock, preferred stock and retained earnings Retained earnings are the only long-term funds the company can generate internally 13 Investment Banking 16-14 14 Securities Markets 16-15 .
