Basics of financial management Chapter 7

Slides:



Advertisements
Similar presentations
McGraw-Hill/Irwin Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved. Shareholders’ Equity: Capital Chapter 11.
Advertisements

FA3 Lesson 3. Shareholders’ Equity 1.Definitions 2.Issuance of share capital 3.Retirement of share capital 4.Treasury stock 5.Dividends 6.Stock dividends.
CORPORATIONS: DIVIDENDS, RETAINED EARNINGS, AND INCOME REPORTING CHAPTER 15.
Risk and Return, Business Structures By R. S. Miolla.
Chapter 2 - Understanding Financial Statements, Taxes, and Cash Flows  2005, Pearson Prentice Hall.
McGraw-Hill/Irwin © 2008 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-1 McGraw-Hill/Irwin © 2008 The McGraw-Hill Companies, Inc., All Rights.
CHAPTER 12. Chapter 12Mugan-Akman Forms of Business Organizations Sole Proprietorship-natural person merchant General Partnership Limited Partnership.
Chapter McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. 1 Introduction to Corporate Finance.
FA3 – Lesson 3 Shareholders’ Equity 1.Definitions 2.Issuance of share capital 3.Retirement of share capital 4.Treasury stock 5.Dividends 6.Stock dividends.
Managing Finance and Budgets Seminar 7. Follow-up Activities  Preparation: read Chapter 4 (Both editions),  Describe key concepts: Characteristics of.
Chapter 12  Shareholders’ Equity. Chapter 12Mugan-Akman Forms of Business Organizations Sole Proprietorship-natural person merchant General.
Financial Accounting Accounting is--- Accounting is--- –A system by which assumed responsibility is validated Accounting may validate— Accounting may validate—
CHAPTER 1 Introduction to Corporate Finance 1. Why Study Finance? Marketing Budgets, marketing research, marketing financial products. Accounting Dual.
Overview of Finance. Financial Management n The maintenance and creation of economic value or wealth.
Chapter 11 Accounting for Equity. Business Entity Forms Sole Proprietorship Partnership Corporation C 5.
2 Distinctions of companies Separate legal entity Separation of ownership and management Ownership through shares Limited liability is usual. It is the.
Equity Financing C H A P T E R 12. Learning Objective 1 Distinguish between debt and equity financing and describe the advantages and disadvantages of.
Chapter 2 - Understanding Financial Statements, Taxes, and Cash Flows 09/02/08.
PowerPoint Authors: Susan Coomer Galbreath, Ph.D., CPA Charles W Caldwell, D.B.A., CMA Jon A. Booker, Ph.D., CPA, CIA Cynthia J. Rooney, Ph.D., CPA CHAPTER.
FINANCING: Part 3A: Equity CHAPTERS CORPORATIONS Kinds Profit or non-profit Publicly-held, or privately held Sole Proprietorship PartnershipCorporation.
Slide 1 Understanding Financial Statements, Taxes, and Cash Flows Income Statement Balance Sheet Taxes Free Cash Flow (FCF)
Balance sheet as at 01/04/11 $000$000$000 Fixed assets 500 Current assets: Stock 50 Debtors 150 Cash
PARTICIPATING PREFERRED l Fully Participating »Shares equally with the common stock in any extra dividends »Distributed proportionally, based on total.
Financing a Business Chapter 16 Chapter 16 Financing a Business
Copyright © Cengage Learning. All rights reserved. Chapter 11 Contributed Capital.
Chapter 16 LIMITED LIABILITY COMPANIES (LLC). LLC - General A limited liability company is any company whose capital is broken up into small amounts called.
Company profit and loss account Same approach as before except we need to consider the following: –Directors’ remuneration, audit fees, interest on debentures.
AC120 lecture 25 Nature of limited companies Final accounts of limited companies Source: –Thomas, Chapters 26 and 27.
© Pearson Education Limited 2003 Atrill, McLaney: Accounting and Finance for Non-Specialists, 4th edition OHT 4.1 Accounting for limited companies OBJECTIVES.
Chapter Eight Proprietorships, Partnerships, and Corporations © 2015 McGraw-Hill Education.
Chapter One Elements of Financial Statements. Market Allocation Customers Investors Creditors Restaurant + + = Stakeholders needing information for decisions.
Copyright © 2009 Pearson Prentice Hall. All rights reserved. Chapter 7 Stock Valuation.
The McGraw-Hill Companies, Inc. 2006McGraw-Hill/Irwin Chapter Eleven Accounting For Equity Transactions.
Financing Growth You need to know internal and external sources of finance. You also need to know the advantages and disadvantages of a range of different.
EQUITY in finance Damian Sternberg. Company BANK EQUITY capital External finance EQUITY capital is the amount of a company´s capital which is owned by.
Copyright: M. S. Humayun Financial Management Lecture 2 Addendum Some Definitions.
Forms of Business Ownership. “C” Corporation Unlimited owners (shareholders) No personal liability for shareholders Taxed on earnings at corporate level.
Chapter 15 Sole Proprietorships, Partnerships, Corporations and Manufacturing Companies.
VALUATION OF SHARES AND DEBENTURE. NEED OR PURPOSE  When two or more companies amalgamate or one company absorb another company.  When a company has.
Stockholders’ Equity Three primary forms of business organization The Corporate Form of Organization ProprietorshipPartnershipCorporation.
Proprietorships, Partnerships, and Corporations Chapter 8 Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.
Chapter 15 Part 1 DIVIDENDS A dividend is a distribution by a corporation to its shareholders on a pro rata (equal) basis. Dividends may be in the form.
McGraw-Hill/Irwin © 2008 The McGraw-Hill Companies, Inc., All Rights Reserved. 1-1 McGraw-Hill/Irwin © 2008 The McGraw-Hill Companies, Inc., All Rights.
Finanacial Statements Balance Sheet & Profit and Loss Account.
Chapter 2 – Introduction to Limited Company Financial Statements Accounting terminology Advantages of forming a limited company The Companies Acts / Governing.
Advanced Financial Accounting FIN-611 Mian Ahmad Farhan Lecture-21 Limited Companies.
Financial Accounting Chapter 2. Investing and Financing Decisions and the Balance Sheet.
Chapter 46 Corporate Stocks and Bonds Twomey, Business Law and the Regulatory Environment (14th Ed.)
Chapter 1- Introduction to Companies
Financial Accounting. 2 3 Section F: Preparing Basic Financial Statements Designed to give you knowledge and application of: F1. Statement of financial.
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
Types of Businesses Balance Sheet IS SRE SCF $100 $100 $100 $100 $100
12 Shareholders’ Equity © 2012 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or.
Fundamentals of Corporate Finance
Advanced Financial Accounting FIN-611
© 2008 The McGraw-Hill Companies, Inc., All Rights Reserved.
Chapter 2 - Understanding Financial Statements, Taxes, and Cash Flows
ACCOUNTING CYCLE OF A CORPORATION
© 2015 Cengage Learning. All Rights Reserved.
Sources of Equity Financing
Financing a Business Chapter 16 Chapter 16 Financing a Business
IAS & IFRS applicable to company investments
Planning Equity Financing
Unit 18 December 5, 2018.
(Financial Statements) Accounting Principles, Eighth Edition
Chapter 14 Sale of shares.
Role and Environment of Managerial Finance
Role and Environment of Managerial Finance
Financial Management Lecture 2
Introduction & Terminology
Presentation transcript:

Basics of financial management Chapter 7

Equity (owner’s equity) Equity = contributed capital Sole proprietorship Partnership Equity = share capital + reserves Joint stock company

Share Participation in the capital (equity) of a joint stock company Share Ownership Control Financing Profit distribution (dividend)

Types of shares Ordinary shares Preferred shares Privileges Control Additional rights with regard to controlling interests Control Preference in dividends Profit distribution

Dividend Profit distribution to shareholders Time Form Cash dividend (in cash) Stock dividend (in shares) Time (during financial year) Interim dividend (end of financial year) Final dividend

Share value Par value Book value Intrinsic value Market value Value on the balance sheet Par value Assets - liabilities Book value Present value of forecasted profits Intrinsic value Value at stock exchange on the basis of supply and demand Market value

Reserves Open reserves Hidden reserves Share premium  share issue Retained earnings  not distributed profit Revaluation reserve  increase of asset value Open reserves Do not appear on the balance sheet Size unknown Example: low valuation of asset Hidden reserves

Increase of equity in a PLC  Retained earnings Retaining profit  Share capital + share premium Share issue Private placement Direct issue to existing or new shareholders Public offering Open subsciption Rights issue

Existing shareholders have priority Rights issue of shares Existing shareholders have priority Subcription right Right value

Risk of share issue failure Guichet emissie Company bears the risk Underwritten issue Banks bear the risk

Feedback: Privacy Policy Feedback
Do Not Sell My Personal Information
About project: SlidePlayer Terms of Service

© 2024 SlidePlayer.com. Inc. All rights reserved.