Financial Management: An Introduction

Abstract

This technical note provides an overview of Financial Management. It is intended as a note to accompany the opening session of case-based course in corporate finance or financial management, as a way of orienting students as to what they should expect and not expect from such a course. Excerpt UVA-F-1742 Nov. 14, 2016 Financial Management: An Introduction While there are many skills that are important for business managers, this note makes the case that financial management is one of the “must have” skills. This note provides an overview of financial management principles and answers to common questions and misconceptions about the topic. In so doing, the note motivates the relevancy of a strong background in financial management. Financial management provides a set of principles and tools that help managers accumulate and allocate capital in a firm. A firm's capital is the money the firm needs to carry out its full set of business operations. The objective that governs financial management decisions is that of economic value creation. For any business decision, value is created when the total value of the benefits accrued exceeds the total value of the resources expended. As business managers embrace the principles of financial management they become skilled at appreciating the value implications of their business decisions. Question 1. Isn't financial management only helpful to those who interact regularly with investors and financial markets? . . .