Finance Term and Roles

Return on assets is an efficiency ratio. It compares the profits generated with the asset base required. It answers the question, how hard

Investments. “The analysis and process of choosing securities and other assets to purchase.” (Cornett, Adair, & Nofsinger, 2016, p. 7).

Corporate finance is important to all managers because it allows a manager to be able to predict the funds the company will need for their upcoming projects and think about ways to organize and acquire those funds.

Debt is a burden that is implemented by those who own it. Debt is the punishment for any group or person that dedicates their work to only helping those in need. Debt can only be lifted by those with enough money. An employer helps an employee 's debt in exchange for work, a student 's debt is alleviated if the University grants a scholarship, a bank receiving a bailout from the government ; or a person/group giving money, donating money to something or someone else. The only way that there is no cost to the receiver, is if the money were given. Workers must work for there money, a student must succeed in school, and a donation must be to a certain thing and

One such metric used by security departments and many organizations to ensure capitol is allocated in the areas it will do the most good is known as return on investment (ROI). ROI looks at the total amount of capital expenditures for the budgeted item or project. Management can then assess whether the total cost of the system provides the necessary return on investment to justify the expenditure. For example, if a security department was installing a new employee badging system, management would look at the capital cost of the system to assess if it provides the necessary return on investment by preventing unauthorized access and protecting

List and describe the three career opportunities in the field of finance. Finance has three main career paths: financial management, financial markets and institutions, and investments. Financial management involves managing the finances of a business. Financial managers—people who manage a business firm's finances—perform a number of tasks. They analyze and forecast a firm's finances; assess risk, evaluate investment opportunities, decide when and where to find money sources and how much money to raise, and decide how much money to return to the firm's investors. Bankers, stockbrokers, and others who work in financial markets and institutions focus on the flow of money through financial institutions and the markets in which financial assets are exchanged. They track the impact of interest rates on the flow of that money. People who work in the field of investments locate, select, and manage income-producing assets. For instance, security analysts and mutual fund managers both operate in the investment field.

* Return on assets (ROA) – ROA shows how successful a company is in generating profits on the amount of assets they own. Since assets consist of debt and equity, ROA is a measure of how well a company converts investment dollars into profit. The higher the percentage, the more profit a company is generating per dollar of investment. Similar to ROS, this ratio needs to be looked at compared to the industry as different industries have different requirements that can affect ROA. For example, companies in the airline and mining industries need expensive assets to operate so will have lower ROA’s compared to companies in the pharmaceutical or advertising industries.

I. Rate of Return on Total Assets: Measures the company’s profitability relative to total assets. A percentage increment for Company G, from 12.30% to 13.68% (2011-12) keeps them above industry benchmarks (8.60% and 12.30%). Rate of Return on Total Assets represents strength for Company G.

It also helps in understanding the value of the business assets it owns and this can used to help you and other interested parties such as investors, creditors or shareholders to assess the worth of your business at a given moment.

A financial resource is like a bank loan or a mortgage they are when you receive financial assistants with paying for something like a car or a divorce. Paying for utilities is a type of an expense, when you have to pay for things like water, electrical, and heating. A debt is something when you owe money to another party after taking out a loan, debts you pay after a long period of time.

The Return on Equity ratio is a measure of the efficiency with which a company employs owners’ capital. It

Credit debt is defined as results when a client of a credit card company purchases an item or service through the card system. The credit system was designed as a way to bring people out of bad conditions of living. Student loans for college and leasing a car are two really big credit loans. This affected every person who owns a credit card and struggles to pay it back. (Wolff-Mann, F.)

Debt financing, by contrast, is cash borrowed from a lender at a fixed rate of interest and with a predetermined maturity date. The principal must be paid back in full by the maturity date, but

Finance is the study of applying specific value to things we own, services we use and decisions we make. Financial management is the process for and the analysis of making financial decisions in the business context. The major subareas of finance are investments, financial management, financial institutions, market, and international finance. Risk is a potential future negative impact to value and or cash flow. It is often discussed in terms of probability of loss and the expected magnitude of the loss.

Return on investment (ROI) measures the rate of return generated by an investment center’s assets (Jackson, Sawyers, Sweeney, & Anderson, 2008). ROI is broken down into two components margin and asset turnover. Margin is a measure of operating performance and asset turnover is a measure of how effectively assets are used during a period (et. al. 2008).