Provide 1 response to each student post. Each response should be 150 words each. Turnitin and Waypoint is being used to check for plagiarism and Please use APA format. Christopher Batastini...

Christopher Batastini

The goal of any corporation is maximize profit. As a manager, your role in this process is to plan, forecast, analyze, and evaluate how to make this happen, while staying within the legal and regulatory boundaries (Byrd, Hickman, & McPherson, XXXXXXXXXXThe need to understand stocks, bonds, investments, cash flows, loans and many other financial entities that an organization uses to ensure they are meeting the financial objectives expected of the company. The need to understand market characteristics is crucial and would include competiveness, efficiency, and liquidity. Byrd (2013), explains liquidity as “the ability to sell a security quickly without having to offer a substantial price reduction to attract buyers”. Market competiveness has a direct impact on potential long-term performance company investments and cash flows. A manager also needs to be familiar with the different market information efficiency hypotheses (weak-form, semistrong-form, strong form), and how “fair and efficient financial markets, such as those with prohibitions against insider trading, encourage investors to participate and thereby increase the pool of available funds” (Byrd et al., 2013, Sec. 2.3, Para. 37). Being able to interpret corporate financials on the Financial Balance Sheet is a key responsibility and assists in the decision-making process. The two types of important financial decisions that managers will make are which investments should be made (left hand side of FBS) and how will financing for these investments be acquired (right hand side of FBS) (Byrd et al., XXXXXXXXXXManagement and senior leadership not fulfilling their responsibilities affects the bottom line and everyone in between. For example in 2008 when the top three auto makers in the U.S. were about to go under, Former President Obama was under pressure to assist them (at the taxpayer expense) by bailing them out because it would not only affect the automakers and their immediate employees, but millions of those employed by companies that manufacture parts for them as well.

Chris

References

Byrd, J., Hickman, K., & McPherson, M. (2013).Managerial Finance. [Electronic version]. Retrieved from https://content.ashford.edu/

Timothy Mccranie

As a manager of a corporation, it is important to visualize how finance and capital acquisition activities have an impact on your organization. Financial management involves planning, forecasting, analysis, and evaluation, as well as understanding legal and regulatory issues (Byrd, Hickman, and McPherson, 2013, sect. 1.1).

Managers must have a clear financial picture of the corporation’s finances and understand how decisions will affect their accounts. The financial balance sheet is a tool used by management. The long-term viability of any business depends on how well managers understand the limits and opportunities that external forces exert on their organization.

Understanding the markets in which corporations participate is essential to understanding corporations themselves (Byrd, Hickman, and McPherson, 2013, sect. 2.1, para. 7). The purpose of a market is to provide a mechanism for individuals and businesses to exchange goods and services by bringing investors together. The manager must understand the characteristic behavior of the market for their corporation to operate in the market. Financial markets offer liquidity of securities, which means that the ability to sell securities quickly. Buying and selling securities promote market growth. Competition drives selling price to the marginal cost of production, and producers earn only a normal profit. Competition drives prices up and increases the profitability of a corporation. Lastly, managers must be efficiency refers to the degree to which market prices reflect all available, relevant information. This is information the manager must have to ensure the stock prices of their corporation gets the maximum amount of opportunities to investors without increasing the transaction costs.

A financial balance sheet is a tool used for visualizing the financial functions of the firm and its objectives. It provides a record of cash flows, investments, and claims by the firm, and a conceptual construct of the corporation’s financial health.

An example of what can happen when management does not fulfill their responsibilities as related to the finances of their corporation can be seen everywhere. Locally, I observed this happening with one of our hospitals. A federal audit of the hospital revealed it could not account for about $30 million on its financial books. These allegations led to the hospital being required to repay 21.4 million to resolve false Medicaid claims and accounting irregularities. The situation cost the CEO and the CFO their jobs, and eventually, the hospital sold to another hospital who paid off their debts. These two individuals lost control of the company’s financial health and the loss of confidence in their leadership.

Reference

Byrd, J., Hickman, K., & McPherson, M. (2013). Managerial Finance [Electronic version]. Retrieved from https://content.ashford.edu/