Week 11 Assignment Notes
Week 11 Assignment Notes BUS 1010
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This 2 page Class Notes was uploaded by Rachel Notetaker on Tuesday March 8, 2016. The Class Notes belongs to BUS 1010 at Clemson University taught by Bill Tumblin in Summer 2015. Since its upload, it has received 26 views. For similar materials see Intro to Business in Business at Clemson University.
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Date Created: 03/08/16
Week 11 Assignment: Finance The first three learning Objectives Explained Explain the roll and responsibilities of financial managers. Finance activities include preparing budgets; doing cash flow analysis; and planning for the expenditure of funds on such assets as plant, equipment, and machinery. Financial management is the job of managing a firm’s resources to meet its goals and objectives. Financial managers examine financial data prepared by accountants and recommended strategies for improving the financial performance of the firm. Outline the financial planning process, and explain the three key budgets in the financial plan. Financial planning means analyzing shortterm and longterm money flows to and from the firm. Its overall objective is to optimize the firm’s profitability and make the best user of its money. It has three steps: (1) forecasting the firm’s shortterm and longterm financial needs, (2) developing budgets to meet those needs, and (3) establishing financial controls to see whether the company is achieving its goals. Three key budgets in the financial plan: A capital budget highlights a firm’s spending plans for major asset purchases that often require large sums of money, like property, buildings, and equipment. A cash budget estimates cash inflows and outflows during a particular period, like a month or a quarter. It helps managers anticipate borrowing needs, debt repayment, operating expenses, and shortterm investments, and is often the last budget prepared. The operating (or master) budget ties together the firm’s other budgets and summarizes its proposed financial activities. More formally, it estimates costs and expenses needed to run a business, given projected revenues. The firm’s spending on supplies, travel, rent, technology, advertising, and salaries is determined in the operating budget, generally the most detailed a firm prepares. Explain why firms need operating funds. Virtually all organizations have operational needs for which they need funds. Key areas include: Managing daybyday needs of the business Controlling credit operations Acquiring needed inventory Making capital expenditures Wall Street Journal article: “Burger King Returns to Its Roots” Now that their brand is back on track what are executives thinking? What financial measure grew faster than most of their big rivals? Why did 3G sell nearly allcompany owned stores (a strategic/financial decision)? Executives now feel comfortable again about expanding in this country (America)—potential to add thousands of new Burger Kings. Same-store sales at U.S. and Canadian restaurants grew 5.7% last year, better than most big rivals. 3G sold nearly all company-owned restaurants to franchisees to reduce risk and to focus on building the brand.