Back to course 'BUS202: Principles of Finance'

Topic outline

  • Unit 1: Introduction To Finance

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    Finance is a broad subject, and financial decisions are all around us. Whether you work on Wall Street or in a small company, finance is vital to every business. Therefore, understanding the fundamentals of finance is essential to your business education. In this unit, you will learn about the goal of financial managers, which is to maximize the wealth of shareholders, and why that is important. You will also learn the differences between the types of business organizations that operate in the United States and their advantages and disadvantages. This unit also explains how the financial markets in our country work and the general terminology used throughout the field. Ethical issues that affect the field of finance are also reviewed in this section. Understanding where ethical dilemmas might arise in the workplace is vital for all employees who may be affected by the decisions they, or their management, make.

    Completing this unit will take approximately 6 hours.

    • Upon successful completion of this unit, you will be able to:

      • explain the primary goal of financial management;
      • differentiate the advantages and disadvantages of the main forms of business organization in the US;
      • illustrate the importance of ethical decision making in the field of finance; and
      • examine the impact of agency issues on financial management.

    • 1.1: Introduction to Concepts in Finance

      • book icon
        Introducing Finance Book
        Students must
        Mark as done

        Read this introductory article, which will help you understand what the field of finance encompasses. What do you learn in a course in finance that you do not learn in financial accounting? How does finance build on what you learned? What does a financial manager do?

    • 1.2: Goal of Financial Management

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        Goals of Financial Management Book
        Students must
        Mark as done

        In this chapter, we will explain the goal of financial management. It is essential to always know the end goal when contemplating various strategies and making financial decisions. If a company focuses only on quality and makes a great product but does not make money, can they stay in business? If managers act to improve their own wealth, what happens to the future value of the corporation?

    • 1.3: Ethics

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        An Overview of Ethics Book
        Students must
        Mark as done

        It is important to examine the ethical considerations involved in finance. You will want to be able to differentiate between ethics and morals. Why is it essential for individuals working in the financial sector to keep organizational, professional, and personal ethical behavior front-and-center?

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        Ethics and Finance Book
        Students must
        Mark as done

        This chapter will review the various ethical considerations that managers in a business face and explain the concept of fiduciary duty. It also examines unique ethical concerns that arise from globalization.

    • 1.4: Business Organization and Governance

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        Types of Business Organizations Book
        Students must
        Mark as done

        It is essential to understand the various ways companies can exist in the US and the impact that company structures have on taxes, regulations, liability, and decision-making. In these sections, you will learn the difference between sole proprietors, partnerships and corporations, and how you decide which form is best for your business.

      • page icon
        Forms of Business Ownership Page
        Students must
        Mark as done
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        Corporate Governance Book
        Students must
        Mark as done

        Corporate governance refers to the system by which companies are governed and controlled. Many different stakeholders have a role in overseeing corporate performance. Financial fraud also can occur when conflicts of interest arise. Many high-profile corporate fraud cases have cost investors and employees billions of dollars and resulted in increased regulations, including the Sarbanes-Oxley Act. If you've heard of companies like Enron, World-com, Adelphia Cable, and investors like Bernie Madoff, you've heard of examples of ineffective Corporate Governance Systems. These large-scale frauds can all be traced back to breakdowns in governance. Everyone working in a business must understand the checks and balances that should exist to protect employees, investors, and the public.

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        Agency and Conflicts of Interest Book
        Students must
        Mark as done

        Conflicts naturally occur between owners and managers, and companies must have policies to ensure that employees are working for the benefit of the owners.

    • 1.5: Asset Classes

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        Asset Classes Book
        Students must
        Mark as done
        This section will help you understand the basic definitions of assets that we will use throughout this course.

    • 1.6: Institutions, Markets, and Intermediaries

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        Institutions, Markets, and Intermediaries Page
        Students must
        Mark as done

        This article discusses the financial intermediary as an institution that facilitates the flow of funds between individuals or other economic entities. By the end of this article, you will be able to discuss the purpose and types of financial institutions and identify the role that financial intermediaries play in the economy.

      • book icon
        Financial Markets Book
        Students must
        Mark as done

        Financial markets function to transfer capital between buyers and sellers and provide corporations and individuals with sources of investing and raising funds. In this section, you will get to know the types of financial markets in the US economy and their role in corporate governance.

    • Unit 1 Practice and Assessment