Financial management

Respond to five questions about finance and financial management. 

This assessment addresses various terms used in finance and financial management. After completing this assessment, you will have demonstrated your understanding of the following;

· The role of a finance manager in an organization.

· The finance manager's goals and objectives.

· The challenges faced by a finance manager on a daily basis.

· Why ethical behavior is so important in this field.

By successfully completing this assessment, you will demonstrate your proficiency in the following course competencies and assessment criteria:

· Competency 1: Evaluate the global financial environment. 

. Explain the concept of shareholder wealth maximization.

· Competency 2: Define finance terminology and its application within the business environment. 

. Define the terms "finance" and "finance management."

. Identify major sub-areas of finance.

. Define the forms of business ownership.

. Define the term "agency relationship."

. Define the term "agency problem."

· Competency 3: Evaluate the financial health of an organization. 

. Explain why ethical behavior is especially important in the field of finance.

Context

Financial managers are known as the agents of owners who are the stockholders in a company. The goal of financial managers is to maximize the shareholders' wealth. Shareholders have many options to invest their money. Financial markets bring investors and borrowers together for transfer of funds from investors to firms. For the markets to be efficient, proper rules and regulations are necessary.

Suggested Resources

The following optional resources are provided to support you in completing the assessment or to provide a helpful context. For additional resources, refer to the Research Resources and Supplemental Resources in the left navigation menu of your courseroom.

Library Resources

The following e-books or articles from the Capella University Library are linked directly in this course:

· Weaver, S. C., & Weston, J. F. (2001).  Finance and accounting for nonfinancial managers . New York, NY: McGraw-Hill.

· Sherman, E. H. (2011).  Finance and accounting for nonfinancial managers  (3rd ed.). New York, NY: American Management Association.

Course Library Guide

A Capella University library guide has been created specifically for your use in this course. You are encouraged to refer to the resources in the  BUS-FP3062 – Fundamentals of Finance Library Guide  to help direct your research.

Bookstore Resources

The resources listed below are relevant to the topics and assessments in this course and are not required. Unless noted otherwise, these materials are available for purchase from the  Capella University Bookstore . When searching the bookstore, be sure to look for the Course ID with the specific –FP (FlexPath) course designation.

· Cornett, M., Adair, T., & Nofsinger, J. (2016). M: Finance (3rd ed.). New York, NY: McGraw-Hill.

Instructions

Respond to the following five questions. Write your responses in a Word document, and number them 1–5.

1. Define the terms finance and financial management. What are the major sub-areas of finance?

2. Identify and define the three basic forms of business ownership. Describe the advantages and disadvantages of each.

3. Define the terms agency relationship and agency problem. Explain three different approaches to minimizing the agency problem.

4. Explain why ethical behavior is so important in the field of finance.

5. Explain the concept of shareholder wealth maximization. Is there a conflict between the goal of shareholder wealth maximization and the financial manager's need to act in an ethical manner? Why or why not?

Use references to support your answers as needed. Be sure to cite all references using correct APA style. Your responses should be free of grammar and spelling errors, demonstrating strong written communication skills.