Introduction
Contents
Introduction¶
What is finance?¶
All sorts of organizations need to deploy funds or invest funds and raise additional funds for investment.
“The study of corporate finance covers the principles, analytical tools, and institutional knowledge a manager needs to make good investment and financing decisions.”
Financial infrastructure are the systems for monitoring cash and cash flow, for creating operating and financial budgets, for measuring and reporting its financial and operating performance, for managing its current and expected tax liabilities, and so forth.
Financial Statements¶
It is necessary to work with financial statements to analyze business.
“Financial statements do not give a complete or an ideal rendering of a business, but they are ubiquitous and convenient.”
They share a common form across many different types of businesses
They express everything in common units.
They provide a systematic way of linking the past, present, and (expected) future performance.
Financial statements are quantitative in nature and provide a sound base for evaluating any business, since it would be too difficult to evaluate a business based just on words and pictorially.