Strategy and Adding Value in Finance
Strategy and adding value in finance means aligning competitive goals with shareholder wealth through profitable decisions.
Comparative and Competitive Advantages in Finance
Comparative advantage is producing at lower cost and competitive advantage is outperforming rivals through market strengths.
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Financial Strategy and Financial Planning
Financial strategy guides long-term financial goals and financial planning manages short-term financial actions. Financial strategy and financial planning together refer to the long-term direction and short-term actions a company takes to manage finances, align investments, budgets, and funding decisions with strategic goals, and maximize shareholder value.
Shareholder Wealth Maximization and Accounting Irregularities
Shareholder wealth maximization refers to the corporate objective of increasing the value of the firm as reflected in the price of its shares, thereby maximizing returns to shareholders. This principle often drives managerial decisions and strategic planning.
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Motivating Managers: Executive Compensation
Executive compensation refers to the financial and non-financial rewards provided to top management of a company, including salaries, bonuses, stock options, and other benefits.
Agency Relationship
An agency relationship is a fiduciary connection in which one party authorizes another to act on their behalf in business or legal matters.
Objective of Financial Management
The objective of financial management refers to the primary aim or goal that guides all financial decisions within an organization.
Other Forms of Business
The other forms of business are master limited partnership (MLP), professional corporation (PC), joint venture, and virtual enterprise.
Limited Liability Company (LLC)
A Limited Liability Company (LLC) is a business structure that protects its owners from personal liability and allows pass-through taxation.
Corporation
A corporation is a legal entity that is separate and distinct from its owners, created under the authority of law.