Think of yourself as the chief financial officer and major shareholder of a well-run medium-sized corporation. You want to expand your company and make the most of your money. What should you do next?
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Think of yourself as the chief financial officer and major shareholder of a well-run medium-sized corporation. You want to expand your company and make the most of your money. What should you do next?
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- Assume that you are a financial manager and significant owner of a successful medium-sized business. You want to grow your business and use your financial assets effectively. What should you do?If you are the Chief Finance Officer (CFO) of the company, how you maximise yourshareholder wealth?In order to run a business, operations must be funded from day to day. In order to fund their ventures, many business owners turn to investors to help financially. What is the resulting investment called? a) Capital b) Corporate dividends c) Expenses d) Revenue
- Suppose you are the president of a large corporation located in Seattle, Washington. How do you think the stockholders will react if you decide to increase the proportion of the company’s assets that is financed with debt from 35 percent to 50 percent? In other words, what if the firm used much more debt to finance its assets?Texo Enterprises is a relatively small and new business firm and you have been appointed as their new Finance Manager. What are your expected functions of this new position?You are a consultant for several emerging, high-growth technology firms that were started locally and have been a part of a business incubator in your area. These firms start out as sole proprietorships but quickly realize the need for more capital and often incorporate. One of the common questions you are asked is about stockholders equity. Explain the characteristics and functions of the retained earnings account and how the account is different from contributed capital.
- You are a consultant for several emerging, high growth technology firms that were started locally and have been a part of a business incubator in your area. These firms start out as sole proprietorships but quickly realize the need for more capital and often incorporate. One of the common questions you get is about stockholders equity. Explain the key ways the companies need to view retained earnings if they want to use it as a source of capital for future expansion and growth after incorporating.Consider the dilemma you might someday face if you are the chief financial officer of a company that is struggling to maintain a positive cash flow, despite the fact that the company is reporting a substantial positive net income. Maybe the problem is so severe that there is often insufficient cash to pay ordinary business expenses, like utilities, salaries, and payments to suppliers. Assume that you have been asked to communicate to your board of directors about your companys year, in retrospect, as well as your vision for the companys future. Write a memo that expresses your insights about past experience and present prospects for the company. Note that the challenge of the assignment is to keep your integrity intact, while putting a positive spin on the situation, as much as is reasonably possible. How can you envision the situation turning into a success story?As a bakery business continues to grow, cash flow has become more of a concern. The board of directors would like to maintain the market share price, so a discussion ensues about issuing a stock dividend versus a cash dividend. As a newly appointed board member you listen to the conversation and need to cast your vote. Which do you vote for: stock dividend or cash dividend?
- Consider the dilemma you might someday face if you are the CFO of a company that is struggling to satisfy investors, creditors, stockholders, and internal company managers. All of these financial statement users are clamoring for higher profits and more net assets (also known as equity). If at some point, you suddenly found yourself not meeting the internal and external earnings and equity targets that these parties expect, you would probably search for some way to make the financial statements look better. What if your boss, the CEO, suggested that maybe you should make just one simple journal entry to record all the goods that your company is holding on consignment, as if that significant amount of goods were owned by your company? She might say that this action on your part would fix a lot of problems at once, since adding the consigned goods to merchandise inventory would simultaneously increase net assets on the balance sheet and increase net income on the income statement (since it would decrease cost of goods sold). How would you respond to this request? Write a memo, detailing your willingness or not to embrace this suggestion, giving reasons behind your decision. Remember to exercise diplomacy, even if you must dissent from the opinion of a supervisor. Note that the challenge of the assignment is to keep your integrity intact while also keeping your job, if possible.One fine day, you and your friend chit chat over at tea stall and your friend asked for an financial advice. We always argue that company that pays high dividend meaning that company is doing well. In fact, it is always not the case because some don't pay the dividend, instead they keep the money for future use. Is there is a perfect payout to fit the shareholders? Please consider a few considerations like the nature of the business, which industry, future growth and expansion plan, capital gain, and many others. Decribe it to your understanding.Why should maximizing the wealth of our owners be your PRIMARY financial objective as a future Chief Financial Officer of a publicly listed firm, but corporate social responsibility is considered secondary only?