Need this by 8 pm tonight
Nokcool
repliesdisccusion.docx1.
Tuesday Nov 5 at 8:02am
Corporate managers have a responsibility to act in the best interest of the company over the long term. One of the characteristics of a corporation is that its existence is not tied to a specific owner or partner and it should continue to operate past any one manager or CEO. A corporation’s current stock value can fluctuate a great deal from day to day for a number of reasons. News reports related to political issues, actions by foreign governments, sales forecasts, and predictions of production costs or prices can all have a significant effect on the current stock price of a company. The stock price may not be an accurate representation of the company’s long term profitability or actual performance. A large component of the market value is analysts’ expectations of the company’s cash flows and performance, not necessarily the actual performance. Manager’s primary focus should be on creating and maximizing wealth for the shareholders of the corporation (Byrd, Hickman, McPerson, 2013). Their goal should be creating that wealth in the long term with real revenues and profits, not attempting to reach a short term stock price. A focus on the short term and stock prices can lead to unethical business decisions and a distorted account of the company’s performance. An emphasis on the market price can decrease shareholder value, create misguided incentives for managers, and generate dishonesty in executives (Denning, 2011). A strategy that emphasizes long term profitability and growth is in the best interest of shareholders, executives, and customers.
References
Byrd, J., Hickman, K., & McPherson, M. (2013). Managerial finance [Electronic version]. Retrieved from
https://content.ashford.edu/ (Links to an external site.)
Denning, S. (2011, Nov.). The dumbest idea in the world: maximizing shareholder value. Forbes. Retrieved from
idea-in-the-world/#cefda8d22870
2. Cynthia Lee
This is an interesting discussion post for me. In a hospital setting, long term goals are so vital to sustainability, as billing for procedures and reimbursement take a few months to get on the books. So for my current state, I would say short term profit are important to keep at the forefront, but to not get discouraged if the value drops for a timeframe as you can forecast what should be coming in. Personally it seems that the short term feeds into the success of the long term. Short term goals allow me to adjust quicker in order to help save the bottom line of a long term goal. Our organization is switching from a normal budget to a real time financial planning. This is in hopes to make decisions that affect the now, in a timely fashion, before it negatively affects the long term goals. This is our first quarter of such a program, so we shall see how this new strategy works.
In focusing on the financial balance sheet from the text, when a manager focuses on the short term profits the sustainability of that decision is sometimes questionable. If I look at quarter one for the hospital, we did earn money and are in the black. But if I stop to look at quarter three, we were in the red, so in reality we just financially balanced out. While numbers were drastically different in the third quarter, we have seen a rise in the fourth quarter because of trends with insurance and deductibles. Historically, q 2 and 3 are slower, while q 1 and q4 help make up the difference. Just because the first quarter was successful, we have to take the monies earned and sustain the business through the slow quarters that we know are coming. If a manager only looks at the short term, they lose the potential vision of a slower next season for a business. Trends, data, metrics and history are valuable players when looking to the long term. Find the middle line, celebrate the positive returns, and learn what was successful about that time period so we can duplicate it. Finances are never stagnant and constantly fluid. There is a lot of value in learning trends.
Byrd, J., Hickman, K., & McPherson, M. (2013). Managerial finance [Electronic version]. Retrieved from https://content.ashford.edu/
3. Malek Qandil
Nov 4, 2019Nov 4 at 10:14am
Management plays a major role in the finance department. Without them, the circle would not be completed. "Managers, as insiders, have a pretty clear view of both the RHS and the LHS of the financial balance sheet." (Byrd, 2013, 1.5). A manager has to understand every aspect of the business especially in finance. The organization has to rely on the managers to run the business and make the difficult decisions, for example when making a choice whether the organization should invest in something or it should not. The financial balance sheet is best for helping understand where the organizations cash flows are and the current value of investments in the LHS of the balance sheet. Also, it helps because it is somewhat similar to the accounting balance sheets, so they can work together on some things. If management does not fulfill the responsibilities there are a few things that could happen. Investments could go wrong and money would be misplaced. Money could be stolen from the organization without anybody noticing. The debt on the organization could be increased due to them making silly mistakes. I have watched organizations fail due to the finical mistakes that they made. Like Yahoo never investing and buying Google. Since they did not buy google they have grown into becoming a huge organization and then Google tried to buy Yahoo.
Byrd, J., Hickman, K., & McPherson, M. (2013). Managerial finance [Electronic version]. Retrieved from https://content.ashford.edu/
4. Deborah Devault
ThursdayNov 7 at 8:47am
“Corporate finance is, in large part, the study of the interaction between products, stocks, bonds, and the people who make decisions affecting them” (Byrd, 2013). Finance incorporates the study of investors, managers, corporate directors, consumers, and corporate employees where financial managers are involved in planning, forecasting, analysis, and evaluation, as well as understanding legal and regulatory issues (Byrd, 2013). The various aspects of finance that management must understand are cash flow, time, risk, and opportunity costs.
Liquidity relates to how quickly a security can be sold without taking a substantial loss. Liquidity is vital to a finance manager because it helps you determine the amount of cash you have available. Competitiveness is the concept that a company needs to win/lose a situation or that a company needs to outperform others in a particular area, which results in comparative advantage. Financial efficiency is defined as how well the dollars invested in each alternative produce revenues to the agency.
The financial balance sheet (FBS is a deviation of the balance sheet that accountants use, but “it is useful for visualizing the financial functions of the firm and its objectives” (Byrd, 2013). The financial balance sheet lists the investments that are made by the firm and its sources of cash.
