13: Managing Financial Resources
- Page ID
- 3967
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\(\newcommand{\avec}{\mathbf a}\) \(\newcommand{\bvec}{\mathbf b}\) \(\newcommand{\cvec}{\mathbf c}\) \(\newcommand{\dvec}{\mathbf d}\) \(\newcommand{\dtil}{\widetilde{\mathbf d}}\) \(\newcommand{\evec}{\mathbf e}\) \(\newcommand{\fvec}{\mathbf f}\) \(\newcommand{\nvec}{\mathbf n}\) \(\newcommand{\pvec}{\mathbf p}\) \(\newcommand{\qvec}{\mathbf q}\) \(\newcommand{\svec}{\mathbf s}\) \(\newcommand{\tvec}{\mathbf t}\) \(\newcommand{\uvec}{\mathbf u}\) \(\newcommand{\vvec}{\mathbf v}\) \(\newcommand{\wvec}{\mathbf w}\) \(\newcommand{\xvec}{\mathbf x}\) \(\newcommand{\yvec}{\mathbf y}\) \(\newcommand{\zvec}{\mathbf z}\) \(\newcommand{\rvec}{\mathbf r}\) \(\newcommand{\mvec}{\mathbf m}\) \(\newcommand{\zerovec}{\mathbf 0}\) \(\newcommand{\onevec}{\mathbf 1}\) \(\newcommand{\real}{\mathbb R}\) \(\newcommand{\twovec}[2]{\left[\begin{array}{r}#1 \\ #2 \end{array}\right]}\) \(\newcommand{\ctwovec}[2]{\left[\begin{array}{c}#1 \\ #2 \end{array}\right]}\) \(\newcommand{\threevec}[3]{\left[\begin{array}{r}#1 \\ #2 \\ #3 \end{array}\right]}\) \(\newcommand{\cthreevec}[3]{\left[\begin{array}{c}#1 \\ #2 \\ #3 \end{array}\right]}\) \(\newcommand{\fourvec}[4]{\left[\begin{array}{r}#1 \\ #2 \\ #3 \\ #4 \end{array}\right]}\) \(\newcommand{\cfourvec}[4]{\left[\begin{array}{c}#1 \\ #2 \\ #3 \\ #4 \end{array}\right]}\) \(\newcommand{\fivevec}[5]{\left[\begin{array}{r}#1 \\ #2 \\ #3 \\ #4 \\ #5 \\ \end{array}\right]}\) \(\newcommand{\cfivevec}[5]{\left[\begin{array}{c}#1 \\ #2 \\ #3 \\ #4 \\ #5 \\ \end{array}\right]}\) \(\newcommand{\mattwo}[4]{\left[\begin{array}{rr}#1 \amp #2 \\ #3 \amp #4 \\ \end{array}\right]}\) \(\newcommand{\laspan}[1]{\text{Span}\{#1\}}\) \(\newcommand{\bcal}{\cal B}\) \(\newcommand{\ccal}{\cal C}\) \(\newcommand{\scal}{\cal S}\) \(\newcommand{\wcal}{\cal W}\) \(\newcommand{\ecal}{\cal E}\) \(\newcommand{\coords}[2]{\left\{#1\right\}_{#2}}\) \(\newcommand{\gray}[1]{\color{gray}{#1}}\) \(\newcommand{\lgray}[1]{\color{lightgray}{#1}}\) \(\newcommand{\rank}{\operatorname{rank}}\) \(\newcommand{\row}{\text{Row}}\) \(\newcommand{\col}{\text{Col}}\) \(\renewcommand{\row}{\text{Row}}\) \(\newcommand{\nul}{\text{Nul}}\) \(\newcommand{\var}{\text{Var}}\) \(\newcommand{\corr}{\text{corr}}\) \(\newcommand{\len}[1]{\left|#1\right|}\) \(\newcommand{\bbar}{\overline{\bvec}}\) \(\newcommand{\bhat}{\widehat{\bvec}}\) \(\newcommand{\bperp}{\bvec^\perp}\) \(\newcommand{\xhat}{\widehat{\xvec}}\) \(\newcommand{\vhat}{\widehat{\vvec}}\) \(\newcommand{\uhat}{\widehat{\uvec}}\) \(\newcommand{\what}{\widehat{\wvec}}\) \(\newcommand{\Sighat}{\widehat{\Sigma}}\) \(\newcommand{\lt}{<}\) \(\newcommand{\gt}{>}\) \(\newcommand{\amp}{&}\) \(\definecolor{fillinmathshade}{gray}{0.9}\)- 13.1: The Functions of Money
- This page defines money as a demand-driven object with no intrinsic value, highlighting its functions as a medium of exchange, a measure of value, and a store of value. It also stresses the significance of understanding money's role in finance and introduces three government measures of the money supply, though specifics on these measures are not provided.
- 13.2: Financial Institutions
- This page outlines the function of financial institutions as intermediaries between savers and borrowers. It classifies these institutions into two categories: depository (such as commercial banks, savings banks, and credit unions) and nondepository (including finance companies, insurance firms, brokerage houses, and pension funds). Commercial banks are the most common, while savings banks and credit unions emphasize community service.
- 13.3: The Federal Reserve System
- This page focuses on understanding the Federal Reserve System's goals, specifically its use of monetary policy to manage the money supply and influence interest rates.
- 13.4: The Role of the Financial Manager
- This page discusses the crucial role of finance in launching and managing a business, highlighting the need for a financial plan to determine cash requirements based on sales estimates. Using a hypothetical laundry service, it explains how to project sales and assess necessary investments for operations. The text emphasizes the importance of effective financial management for the success of a new business venture.
- 13.5: Understanding Securities Markets
- This page explains the functioning and regulation of securities markets, detailing how companies raise funds through IPOs and how investors evaluate performance. It distinguishes between primary markets for new stock sales and secondary markets for existing stock trading, highlighting major exchanges like NYSE and OTC markets including NASDAQ. Investors focus on company management, growth potential, financial health, and key performance indicators when analyzing stocks.
- 13.6: Financing the Going Concern
- This page explores equity and debt financing for raising $8 million for business expansion. Equity financing increases stockholders' equity and may dilute ownership, while debt financing involves bonds. Common stock comes with high risk and potential rewards, granting control but prioritized last in asset distribution during failures.
- 13.7: Careers in Finance
- This page outlines career opportunities in finance across commercial banking, corporate finance, and the investment industry. It highlights the importance of education in finance, accounting, and economics, alongside essential analytical and interpersonal skills. Roles vary from loan evaluation in commercial banking to managing company finances in corporate finance, and advising on investments in the investment sector.
- 13.8: Cases and Problems
- This page covers entrepreneurial success stories, particularly of Google founders Sergey Brin and Larry Page, highlighting their transition from a search engine to a billion-dollar company and discussing ethical issues during their IPO. It also presents different finance career paths, an insider trading scenario, and strategies for investing in airline stocks through a team project analyzing major airlines' profiles and performance.