Corporate Finance Overview A career in corporate finance

公司金融简介 Corporate Finance Overview A career in corporate finance means you would work for a company to help it find money to run the business, grow the business, plan for it's financial future and manage any cash on hand.

一、什么是公司金融 • Corporate Finance addresses the following three questions: • 1、What long-term investments should the firm engage in? • 2、How can the firm raise money for the required investments? • 3、How much short-term cash flow does a company need to pay its bills?

The Balance-Sheet Model of the Firm Total Value of Assets: Current Assets Total Firm Value to Investors: Current Liabilities Long-Term Debt Fixed Assets 1 Tangible 2 Intangible Shareholders’ Equity

The Balance-Sheet Model of the Firm The Capital Budgeting Decision (Investment Decision) Current Assets Fixed Assets 1 Tangible 2 Intangible Current Liabilities Long-Term Debt What longterm investments should the firm engage in? Shareholders’ Equity

The Balance-Sheet Model of the Firm The Capital Structure Decision (Financing Decision) Current Assets Fixed Assets 1 Tangible 2 Intangible How can the firm raise the money for the required investments? Current Liabilities Long-Term Debt Shareholde rs’ Equity

Capital Structure The value of the firm can be thought of as a pie. The goal of the manager is 70% 25%50%30% to increase the size of the Debt Equity pie. 50% 75% The Capital Structure Equity decision can be viewed as how best to slice up a the pie. If how you slice the pie affects the size of the pie, then the capital structure decision matters.

The Balance-Sheet Model of the Firm The Net Working Capital Investment Decision (Financial Decision) Current Assets Fixed Assets 1 Tangible 2 Intangible Net Working Capital How much short-term cash flow does a company need to pay its bills? Current Liabilities Long-Term Debt Shareholders ’ Equity

四、公司和金融市场 1、公司现金流动图：公司形态的优点因金融市 场的存在而增强 Invests in assets (B) Firm issues securities (A) Retained cash flows (F) Short-term debt Current assets Cash flow from firm (C) Fixed assets Ultimately, the firm must be a cash generating activity. Financial markets Dividends and debt payments (E) Long-term debt Taxes (D) Firm Equity shares Government The cash flows from the firm must exceed the cash flows from the financial markets.

2、Financial Markets（P 12） • Primary Market – When a corporation issues securities, cash flows from investors to the firm. – Usually an underwriter is involved • Secondary Markets – Involve the sale of “used” securities from one investor to another. – Securities may be exchange traded or trade overthe-counter in a dealer（自营商） market.

Financial Markets Firms Stocks and Bonds Money Investors Bob securities Sue money Primary Market Secondary Market