Loading presentation...

Present Remotely

Send the link below via email or IM


Present to your audience

Start remote presentation

  • Invited audience members will follow you as you navigate and present
  • People invited to a presentation do not need a Prezi account
  • This link expires 10 minutes after you close the presentation
  • A maximum of 30 users can follow your presentation
  • Learn more about this feature in our knowledge base article

Do you really want to delete this prezi?

Neither you, nor the coeditors you shared it with will be able to recover it again.


Make your likes visible on Facebook?

Connect your Facebook account to Prezi and let your likes appear on your timeline.
You can change this under Settings & Account at any time.

No, thanks

BUSI 1110 Chapter 16

No description

Brad Anderson

on 1 August 2013

Comments (0)

Please log in to add your comment.

Report abuse

Transcript of BUSI 1110 Chapter 16

Chapter 16 - Financial decisions & risk management
Brad Anderson
Sources & uses of cash
The principle of leverage
Risk management
Short term
Sources of cash
Uses of cash
Trade credit
Secured short-term loans
Unsecured short-term loans
A/R; inventory as collateral
E.g. lines of credit; revolving credit; commercial paper
Cash from operations
Operating expenses
Servicing current liabilities
e.g. accounts payable
Long term
Issuing stock
Retained earnings
Long-term loans
Debt financing
Sources of cash
Hybrid - Preferred shares
Major expansions
Fixed assets
Uses of cash
Sources & Uses of cash
The principle of leverage
A business opportunity
Requires $100,000
Estimated 15% return/year
Finance out of savings
Finance 50% out of savings
Finace 50% with debt
At 12% interest
Expected revenue
Net income
$100,000 x 15% = $15,000
Finance out of savings
$50,000 x 12% = $6000
50% Debt financing
Net income
Owner`s investment
Finance out of savings
50% Debt financing
Risk Management
On your own time ...
...Perform the same exercise, but now assume your new business only generates an 8% return
Read the hand out & discuss the questions at the end
Full transcript