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Chapter 1: Introduction to Financial Management
7/6/2018 BCOR 2200 Introductory Finance Welcome!! 7/6/2018 Chapter 1: Introduction to Financial Management
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BCOR 2200 Introductory Finance General Objectives
7/6/2018 BCOR 2200 Introductory Finance General Objectives Learn basic concepts and principles of finance; To apply these concepts with various financial tools; Prepare finance majors for next step; Relevance for organizational, corporate, and personal uses. 7/6/2018 Chapter 1: Introduction to Financial Management
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BCOR 2200 Introductory Finance Major Topics
7/6/2018 BCOR 2200 Introductory Finance Major Topics Cash flows Time value of money Ratios and financial analysis Risk and return Valuation—companies and projects Securities—stocks and bonds Investments Corporate Personal Role of debt International topics 7/6/2018 Chapter 1: Introduction to Financial Management
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Tom C. Nelson, PhD, CFP® Senior Instructor of Finance
Teaching Senior Seminar in Finance, Investments, and Introductory Finance since 1999 Degree: PhD., University of Colorado at Boulder, 1989 Certified Financial Planner™, 1987 (303) (office) (cell) Koelbel, Room 454 Professional Experience Personal Financial Consultant, 2006 – present Portfolio Manager and Trustee, Wood Trusts, 1995 – present Chief Financial Officer, American Medical Response, 1993 – 1999
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BCOR 2200 Introductory Finance first class handouts
7/6/2018 BCOR 2200 Introductory Finance first class handouts BCOR 2200 Course Syllabus.doc BCOR 2200 Course Schedule.xls Course Conduct and Expectations.doc Clicker Information.doc On-line Homework Assignments.doc 7/6/2018 Chapter 1: Introduction to Financial Management
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Chapter 1 Introduction to Financial Management
7/6/2018 Chapter 1 Introduction to Financial Management Financial Decisions/Activities Business Forms Agency/Stakeholder Issues Financial Management Goals Financial Markets 7/6/2018 Chapter 1: Introduction to Financial Management
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Clicker Question What is your opinion of the field of finance. A
Clicker Question What is your opinion of the field of finance? A. I may pursue a career in finance B. I want to understand finance to better myself C. I find finance more of a “necessary evil” D. I really don’t see myself needing/using finance E. My opinion of finance is still “up in the air”
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Financial Decisions/Activities
7/6/2018 Financial Decisions/Activities Financial activities and decisions can be divided into 3 areas: Operating Investing Financing 7/6/2018 Chapter 1: Introduction to Financial Management
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Financial Decisions/Activities
7/6/2018 Financial Decisions/Activities Operating 7/6/2018 Chapter 1: Introduction to Financial Management
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Financial Decisions/Activities
7/6/2018 Financial Decisions/Activities Investing 7/6/2018 Chapter 1: Introduction to Financial Management
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Financial Decisions/Activities
7/6/2018 Financial Decisions/Activities Financing 7/6/2018 Chapter 1: Introduction to Financial Management
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Financial Decisions/Activities
7/6/2018 Financial Decisions/Activities The “cycle” of financial processes 7/6/2018 Chapter 1: Introduction to Financial Management
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Clicker Question Do you seriously think you might start your own business sometime in your career? A. Yes B. No
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Chapter 1: Introduction to Financial Management
7/6/2018 Business Forms Sole proprietorship Partnership Corporation (C Corporation) “Hybrids” Sub S Corporation General/Limited Partnership LLP/LLC 7/6/2018 Chapter 1: Introduction to Financial Management
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Chapter 1: Introduction to Financial Management
7/6/2018 Business Forms Basis of comparison Size Number Owners Liability Taxes 7/6/2018 Chapter 1: Introduction to Financial Management
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Chapter 1: Introduction to Financial Management
7/6/2018 Business Forms Item Sole Prop Partnership Corporation “Hybrids” Number Many Few Size Small Small-Medium Small-Large Liability Unlimited Limited Tax Pass Through Double taxed Owners Proprietor 2+ Partners Shareholders Partners or shareholders 7/6/2018 Chapter 1: Introduction to Financial Management
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Agency/Stakeholder Issues
7/6/2018 Agency/Stakeholder Issues Definition of Agency Stakeholders Conflicts among stakeholders Management versus shareholders Bondholders versus shareholders 7/6/2018 Chapter 1: Introduction to Financial Management
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Agency/Stakeholder Issues
7/6/2018 Agency/Stakeholder Issues Definition of Agency 7/6/2018 Chapter 1: Introduction to Financial Management
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Agency/Stakeholder Issues
7/6/2018 Agency/Stakeholder Issues Stakeholders of a firm 7/6/2018 Chapter 1: Introduction to Financial Management
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Agency/Stakeholder Issues
7/6/2018 Agency/Stakeholder Issues Conflicts among stakeholders Management versus shareholders Bondholders versus shareholders 7/6/2018 Chapter 1: Introduction to Financial Management
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Clicker Question What is your opinion of this statement: “The primary goal of any firm is to maximize its share price”. A. Correct and appropriate B. Not correct and inappropriate C. Partially correct, but other issues
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Financial Management Goals
7/6/2018 Financial Management Goals Maximize share price Issues: Short versus long run Managing firm risks Managing interests of other stakeholders “Triple bottom line” 7/6/2018 Chapter 1: Introduction to Financial Management
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Chapter 1: Introduction to Financial Management
7/6/2018 Financial Markets Financial Intermediaries Primary versus secondary markets Auction (physical) versus dealer (OTC) markets 7/6/2018 Chapter 1: Introduction to Financial Management
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Chapter 1: Introduction to Financial Management
7/6/2018 Financial Markets Financial Intermediaries 7/6/2018 Chapter 1: Introduction to Financial Management
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Chapter 1: Introduction to Financial Management
7/6/2018 Financial Markets Primary versus secondary markets 7/6/2018 Chapter 1: Introduction to Financial Management
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Chapter 1: Introduction to Financial Management
7/6/2018 Financial Markets Auction (physical) versus dealer (OTC) markets 7/6/2018 Chapter 1: Introduction to Financial Management
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Chapter-end Homework Problems
7/6/2018 Chapter-end Homework Problems Chapter 1 Critical Thinking 1,2,4,6,7 7/6/2018 Chapter 1: Introduction to Financial Management
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