Managing financial resources

Managing Financial Resources

Chapter 13

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Chapter Objectives

Identify the functions of money and describe the government’s measure

Functions Of Money

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Money Supply

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Depository Institutions

Commercial Banks
Savings Banks
Credit Unions

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Nondepository Institutions

Finance Companies
Insurance Companies
Brokerage Firms

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Financial Services

Checking/Savings Accounts
ATMs
Credit/Debit Cards
Loans
Financial Advice
Sells Financial Products
Insurance
Electronic Banking

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Define the Institution

Bank Regulation

Federal Depository Insurance Corporation
1933
Insures Deposits
Periodic Examinations
Office of Thrift Supervision
National Credit

Crisis in the Financial Industry

Risky (sub-prime) loans made for homes

Money Multiplier

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Fluctuating Reserve Rates

You just won $10 million in the lottery and

Federal Reserve System

Central Banking (1913)
12 Districts/Banks
Board of Governors
https://www.stlouisfed.org/in-plain-english/history-and-purpose-of-the-fed

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Tools Of The Fed

Goals
Price Stability
Sustainable Economic Growth
Full Employment
Tools
Reserve Requirements
Discount Rate
Open Market

Open Market Operations

https://www.stlouisfed.org/in-plain-english/a-closer-look-at-open-market-operations

Federal Funds Rate

Federal Funds (Discount Rate)
Prime Rate

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Interest Rates

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Banker’s Bank & Government’s Banker

Check Clearing
U.S. Treasury’s Checking Account
Paperwork in Government

Financial Manager

“…finance is all of the activities involved in planning for,

Developing A Financial Plan

Estimating Sales
Getting The Money
Personal Assets
Loans—Family/Friends
Bank Loans
Making The Financing

Where Small Businesses Get Funding

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Loan Characteristics

Maturity
Short-Term
Intermediate
Long-Term
Line of Credit
Amortization
Security
Collateral
Unsecured
Interest

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Growth Stage Financing

Managing
Cash
Accounts Receivable
Accounts Payable— Trade Credit
Budgeting

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Sources Of Financing During Growth Stage

Bank
Additional Owners
Private Investors

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Investors

Angels
Venture Capitalists
Going Public
Initial Public Offering
Investment Banking Firm

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Markets And Exchanges

Markets
Primary
Secondary
Organized Exchanges
New York Stock Exchange
American Stock Exchange
Over-The-Counter (OTC)

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Regulating Securities Markets

Securities and Exchange Commission (1934)
Prospectus
Insider Trading
Market Indexes
Dow Jones Industrial

The Dow

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NASDAQ Index

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Stock Listing For Hershey Foods

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Interpreting A Stock Quotation

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Learning to Quote Quotations

Explain each item in the stock listing for

Financing The Going Concern

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Equity Financing
Debt Financing

Stockholders’ Equity

Risk/Reward Tradeoff
Dividends
Types of Stock
Common
Preferred
Cumulative
Convertible

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Bonds

“…debt securities that obligate the issuer to make interest payments to

Financing a Multimillion Dollar Plant Expansion

You’re the CFO for a large