1. Financing and Tracking Business Operations Better Business 1st Edition Poatsy · Martin © 2010 Pearson Education, Inc.1 chapter 15 Slide presentation prepared by Pam Janson Stark State College of Technology

2. Financial Management Developing plans that outline the company’s financial short-term and long-term needs Defining the sources and uses of funds that are needed to reach the goals Monitoring the cash flow of a company to ensure that obligations are paid and funds owed to the company are collected Investing any excess funds so that those funds can grow and be used for future developments Raising capital for future growth and expansion © 2010 Pearson Education, Inc. Publishing as Prentice Hall 2

3. Planning for Financial Needs Forecast financial needs Develop budgets and plans to meet financial needs Establish controls to ensure that the budgets and plans are being followed © 2010 Pearson Education, Inc. Publishing as Prentice Hall 3

4. Financing Short-Term Business Needs Short-term financing is repaid within a year Small companies may ask friends and family or use credit cards to cover short-term gaps Large companies get trade credit from suppliers, interim credit from banks, or issue commercial paper Other options: oLine of credit oSecured loan oUnsecured loan oCommercial finance company loan oFactoring © 2010 Pearson Education, Inc. Publishing as Prentice Hall 4

5. Financing Long-Term Business Needs Debt financing oLoans oSecured bonds oUnsecured bonds Equity oRetained earnings oIssuing stock oVenture capitalists © 2010 Pearson Education, Inc. Publishing as Prentice Hall 5

6. Who Uses Financial Statements? Company managers Investors Creditors/lenders Tax authorities Who else? © 2010 Pearson Education, Inc. Publishing as Prentice Hall 6