英文版公司理财chapter1.pptx

1nGrades nAssignments(25%)nClass participation(15%)nFinal exam(60%)nE-mail:2Chapter 1The Corporation and the Financial Manager3Objectives1.Give examples of the investment and financing decisions that financial managers make,and explain the responsibilities of the CFO,treasurer,and controller2.Cite some of the advantages and disadvantages of organizing a business as a corporation3.Explain why maximizing market value is the logical financial goal for the corporation4.Understand why conflicts of interest arise,especially in large,public corporations5.Explain how corporations mitigate conflicts and encourage ethical behavior4ContentnInvestment and financing decisionsnWhat is a corporation?nWho is the financial manager?nGoals of the corporation5Investment decision:投资决策Financing decision:筹资决策Capital budegting decision:资本预算决策Tangible assets:有形资产Intangible assets:无形资产Debt financing:债务资金、债务筹资Equity financing:权益资金、权益筹资Capital structure:资本结构6What is finance?nFinance can be defined as the art and science of managing money.nCorporations face two broad financial questions:What investments should the firm make?And how should it pay for those investments?The first question involves spending money;the second involves raising it.Making good investment and financing decisions is the chief task of the financial manager.7The Investment Decision nInvestment decision/capital budgeting decision:decision to invest in tangible or intangible assetsInvestments in automobile plantInvestments in research and development(R&D)8Balance Sheet Model of the FirmCurrent AssetsFixed Assets1 Tangible 2 IntangibleTotal Value of Assets:Shareholders EquityCurrent LiabilitiesLong-Term DebtTotal Firm Value to Investors:9The Investment DecisionCurrent AssetsFixed Assets1 Tangible 2 IntangibleShareholders EquityCurrent LiabilitiesLong-Term DebtWhat long-term investments should the firm choose?10nIf a projects value is greater than its required investment,then the project is attractive financiallynThe financial manager helps the firm to invest in projects that are worth more than they cost.11The Financing Decision Financing decision:the form and amount of financing of a firms investmentIssue shares of stockborrow from a bank12The Financing DecisionHow should the firm raise funds for the selected investments?Current AssetsFixed Assets1 Tangible 2 IntangibleShareholders EquityCurrent LiabilitiesLong-Term Debt13The choice between debt and equity financing is often called the capital structure decisionnHere“capital”refers to the firms sources of long-term financing.nA firm that is seeking to raise long-term financing is said to be“raising capital.”14Capital StructureThe value of the firm can be thought of as a pie.The goal of the manager is to increase the size of the pie.The Capital Structure decision can be viewed as how best to slice the pie.If how you slice the pie affects the size of the pie,then the capital structure decision matters.50%Debt50%Equity25%Debt75%Equity70%Debt30%Equity15Short-Term Asset ManagementHow should short-term assets be managed and financed?Net Working CapitalShareholders EquityCurrent LiabilitiesLong-Term DebtCurrent AssetsFixed Assets1 Tangible 2 Intangible16Self-Test 1.1nAre the following capital budgeting or financing decisions?Hint:In one case the answer is“both”a.Intel decides to spend$1 billion to develop a new microprocessorb.Volkswagen borrows 350 million euros from Deutsche Bankc.BP(British Petroleum)constructs a pipeline to bring natural gas onshore from a production platform in the Gulf of Mexicod.Budweiser spends 200 million euros to launch a new brand of beer in European marketse.Pfizer issues new shares to buy a small biotech company 17Financing and investment decisions are separated and connectednThe amount of investment determines the amount of financing that has to be raisedn The investors who contribute financing today expect a return on that investment in the futuren Thus,the investments that the firm makes today have to generate future returns for payout to investors18nTo carry on business,corporations need an almost endless variety of real assets.nMany of these assets are tangible,such as machinery,factories,and offices;others are intangible,such as technical expertise,trademarks,and patents.All of them need to be paid for.nTo obtain the necessary money,the corporation sells claims on its real assets and on the cash those assets will generate.These claims are called financial assets or securities.19Flow of cash between financial markets and the firms operations.Key:(1)Cash raised by selling financial assets to investors;(2)cash invested in the firms operations and used to purchase real assets;(3)cash generated by the firms operations;(4a)cash reinvested;(4b)cash returned to investors.20nUltimately,the firm must be a cash generating activity.nThe cash flows from the firm must exceed the cash flows from the financial markets21Self-Test 1.2nWhich of the following are financial assets,and which are real assets?a.A patentb.A share of stock issued by Bank of New Yorkc.A blast furnace in a steel-making factoryd.A mortgage loan taken out to help pay for a new homee.After a successful advertising campaign,potential customers believe that your brand of potato chips is extra crispyf.An IOU(I owe you)from your brother-in-law22nHow can we create value through investment and financing decisions?23ContentnInvestment and financing decisionsnWhat is a corporation?nWho is the financial manager?nGoals of the corporation24Corporation:公司Stockholder/shareholder:股东Legal entity:法人实体Limited liability:有限责任The separation of ownership and management:所有权与经营权相分离25CorporationnCorporation:business organized as a separate legal entity owned by stockholdersnA corporation is legally distinct from its owners,therefore confers limited liabilitynThe separation of ownership and management is one distinctive featurenThere is an important tax drawback（欠缺，弊端）:double taxation26nThe separation of ownership and management has clear advantages.nIt allows share ownership to change without interfering with the operation of the business.It allows the firm to hire professional managers.But it also brings problems if the managers and owners objectives differ.27Forms of Business OrganizationnThe corporate form of business is the standard method for solving the problems encountered in raising large amounts of cash.nHowever,businesses can take other forms.nThe Sole ProprietorshipnThe PartnershipnGeneral PartnershipnLimited PartnershipnThe Corporation28ContentnInvestment and financing decisionsnWhat is a corporation?nWho is the financial manager?nGoals of the corporation29Chief Finanical Officer(CFO):财务总监Treasurer:资金管理人员、司库人员Controller:会计主管人员financial statements:财务报表30Financial managers in large corporations31The Financial ManagerThe Financial Managers primary goal is to increase the value of the firm by:1.Selecting value creating projects2.Making smart financing decisions32nP9 Self-Test 1.333ContentnInvestment and financing decisionsnWhat is a corporation?nWho is the financial manager?nGoals of the corporation34Value maximization:价值最大化Shareholders:股东Stakeholders:利益相关者Profit maximization:利润最大化Owner-manager:业主经理人Principal：委托人Agency problem:代理问题Compensation plan:薪酬计划Board of directors:董事会Security analyst:证券分析师Creditor:债权人Takeover:接管351.3 The Goal of Financial ManagementnWhat is the correct goal?nMaximize profit?nMaximize market share?nMaximize shareholder wealth?36Market value maximizationnValue maximization is the natural financial goal of the firmnMaximizing value maximizes the wealth of the firms owners,its shareholdersnShareholders can invest or consume that wealth as they wishProfit maximization37Ethics and value maximizationnModern finance does not condone(宽恕)attempts to pump up stock price by unethical meansnThe surest route to maximum value starts with products and services that satisfy customersnA good reputation with customers,employees,and other stakeholders is also important for the firms long-run profitability and value38 The Agency RelationshipnPrincipal hires an agent to represent his/her interestnStockholders(principals)hire managers(agents)to run the company39Do managers really maximize value?Conflicts between shareholders and managers objectives create principalagent problems(Agency problem).Shareholders want management to increase the value of the firm,but managers may have their own axes to grind（个人动机，有私心）or nests to feather(中饱私囊）.40Agency problemnOwner-managers have no conflicts of interest in their management of the business.nIn most large corporations,the managers are not the owners,and so managers may act in ways that are not in the best interests of shareholders.(agency problem)Stakeholders41StakeholdersnStakeholders are groups such a employees,customers,suppliers,creditors and others who have a direct economic link to the firm.42How do corporations ensure that managers and stockholders interests coincide?nCompensation plan:link the well-being of employees to that of the firmnMonitoring of management by the board of directors,security analysts,and creditorsnThreat of takeover