[00:06.14]measure n. vt. vi.
[00:09.25]straight adv. a.
[00:10.66]MD：There's no doubt we've got to tighten up on financial control.
[00:15.10]Peter,you're in charge of credit control.What do you suggest?
[00:20.19]FC:Well,I've been looking at our payment terms,in other words how long we have to wait for payment,we must reduce the average delay in payment.
[00:31.87]It's nearly 45 days now from the date we send out the invoice.We've got to get it down to nearly 30 days.It's not easy.
[00:42.84]The sales people always argue it is better to wait for payment rather than lose a customer,but I think we can tighten up on reminders,statements and so on.
[00:54.26]MD:What about our payments to suppliers?
[00:57.57]FC:Well,that's more difficult.
[00:59.79]We are a small company dealing with large suppliers.
[01:03.90]They don't have to help us.
[01:05.91]Still,maybe one or two of our older suppliers could give us better payment terms.
[01:10.87]MD:Right,let's look at some more general cost_cutting measures we can take.
[01:16.83]I'm interested in support services such as training and personnel development.
[01:21.45]PM:Look,I must say something here.
[01:23.72]We simply mustn't cut these services.
[01:26.80]They are our long_term investment in people.
[01:30.49]MD:Maybe,but we've got to reduce costs somehow.
[01:34.46]We can't cut in the production area.I...
[01:37.59]PM:Ture,but our training budget is already very limited.
[01:42.06]Most of the training programmes are long term.
[01:45.64]MD:I'm not saying we have to stop any existing programmes,but perhaps we should look carefully at future training courses.
[01:55.33]PM:Well,I can let you have details of what we plan.I think you'll see that they are all worthwhile investments.
[02:03.56]MD:I'm sure.Anyway,let me have the programme and we'll discuss it later.
[02:09.02]We'll have to stop now.I've got another meeting at 2.
[02:13.09]PM:I must go too.I've got a meeting right away.
[02:26.63]cost of capital
[02:30.86]Financial management is concerned with the maintenance and creation of wealth.
[02:37.26]The goal of the firm is maximization of shareholder wealth.
[02:42.72]Capital gains(or losses)are gains(or losses)from the sale of assets not bought or sold in the ordinary course of business.
[02:52.56]Money market refers to all institutions and procedures that provide for transactions in short_term debt instruments.
[03:02.15]The capital market refers to all institutions and procedures that provide for transactions in long_term financial instruments.
[03:11.71]Real assets are tangible assets like houses,equipment,and inventories.
[03:17.02]Financial assets represent claims for future payment on other economic units.
[03:23.00]Common and preferred stocks,bonds,bills,and notes are all types of financial assets.
[03:29.97]Three basic financial statements are commonly used to describe the financial condition and performance of the firm:
[03:39.40]the balance sheet,the income statement and the cash flow statement.
[03:44.91]Three basic financial statements are commonly used to describe the financial condition and performance of the firm:
[03:52.62]the balance sheet,the income statement and the cash flow statement.
[03:59.31]Financial ratio analysis helps us identify some of the financial strengths and weaknesses of a company.
[04:07.82]The liquidity of a business is defined as its ability ot meet maturing debt obligations.
[04:14.01]Forecasting in financial management is used to estimate a firm's future financial needs.
[04:20.28]Compound interest occurs when interest paid on the investment during the first period is added to the principal and then,during the second period,interest is earned on this new sum.
[04:32.95]Present value is the current value of a future payment.
[04:37.32]The expected returns an investment generates come in the form of cash flows.
[04:42.83]The expected rate of return is a weighed average of all the possible returns,weighed by the probability that each return will occur.
[04:54.30]The investor's require rate of return can be defined as the minimum rate of return necessary to attract an investor to purchase or hold a security.
[05:06.05]Risk for our purposes in the variability of returns and may be measured by the standard deviation.
[05:14.25]A bond is a type of debt or long_term promissory note,issued by the borrower,
[05:20.44]promising to pay its holder a predetermined and fixed amount of interest per year.
[05:27.55]In the case of insolvency,claims of debt in general,including bonds,are honored before those of both common stock and preferred stock.
[05:38.08]The value of a bond is the present value both of future interest to be received and the par or maturity value of the bond.
[05:47.64]Preferred stock is often referred to as a hybrid security because it has many characteristics of both common stock and bond.
[05:56.86]Common stock is a certificate that indicates a share of ownership in the corporation.
[06:02.24]The payback period is the number of years needed to recover the initial cash outlay.
[06:08.14]The net present value(NPV)of an investment proposal is equal to the present value of its annual net cash flows after taxes less the investment's initial outlay.
[06:21.20]The profitability index(P1),or benefit_cost ratio,is the ratio of the present value of the future net cash flows to the initial outlay.
[06:33.74]The internal rate of return(IRR)is defined as the discount rate that equates the present value of the project's future net cash flows with the project's initial cash outlay.
[06:46.96]The weighted average cost of capital is the average of the aftertax costs of each of the sources of capital used by a firm to finance a project where the weights reflect the proportion of total financing arising from each source.
[07:05.93]Capital structure is the mix of the long_term sources of funds used by the firm.
[07:11.26]Target capital structure mix is the mix of financing sources that the firm plans to maintain through time.
[07:20.24]The dividend payout ratio indicates the amount of dividends paid relative to the company's earnings.
[07:28.63]A firm's dividend policy includes two basic components:the dividend payout ratio and the stability of the dividends over time.
[07:38.40]A stock repurchase(stock buyback)is when a firm repurchases its own stock,resulting in a reduction in the number of shares outstanding.
[07:49.71]An integral part of dividend policy is the use of stock dividends and stock splits.
[07:55.82]Working_capital management involves managing the firm's liquidity,which in turn involves managing the firm's investment in current assets,and its use of current liabilities.
[08:08.23]The risk_return trade_off involved in managing the firm's working capital involves a trade_off between the firm's liquidity and its profitability.
[08:20.74]A company-wide cash management program must be concerned with minimizing the firm's risk of insolvency.
[08:30.67]Insolvency describes the situation where the firm is unable to meet its maturing liabilities on time.
[08:40.72]Inventory management involves the control of the assets that are used and produced to be sold in the normal course of the firm's operations.