Distinguish the goal of a firm and the role of a financial manager.
Week 1
CHAPTER 1 An Introduction to the Foundations of Financial Management
This chapter lays a foundation for what will follow. First, it focuses on the goal of the firm, followed by the five principles that form the foundations of financial management and the role of finance in business. The chapter then reviews the legal forms of business organization and discusses the tax implications relating to financial decisions. Finally, the chapter discusses the multinational firm and its role in finance.
In this chapter, we review the contents and meaning of a firm’s income statement and balance sheet. We also look very carefully at how to compute a firm’s cash flows.