Want to create or adapt books like this? Learn more about how Pressbooks supports open publishing practices.

Dr. Kevin Bracker, Dr. Fang Lin and Jennifer Pursley

Chapter Learning Objectives

After completing this chapter, students should be able to

  • Define what is meant by finance and describe some of its primary areas
  • Define and compare/contrast sole proprietorships, partnerships, and corporations
  • Identify key advantages/disadvantages of the corporate form of ownership
  • Define and identify key characteristics of stocks and bonds
  • Define the primary goal of financial management and identify the three elements that impact achieving that goal
  • Explain and apply the concept of risk aversion
  • Explain how social responsibility and ethical behavior is consistent with maximizing shareholder wealth
  • Define the concept of agency relationships and explain how they influence the goal of maximizing shareholder wealth

What is Finance?

There are many different definitions of finance, but for the purposes of this course, we are going to define it as follows:

Finance refers to the process of allocating capital in order to optimize the risk-adjusted expected return on that capital.

This can apply to corporate finance where firms are allocating capital across various operations within the firm, making decisions which long-term projects they should undertake, developing dividend policy, planning how to raise funding, etc. It can also apply to banking where financial institutions evaluate who to lend money to and how much to charge in interest rates. It can apply to personal finance where individuals develop budgets to manage their spending and make investments to meet future goals, such as retirement.

There are several primary areas of finance. These include:

Commercial Banking/Financial Institutions

  • Commercial banks, credit unions, insurance companies and countless other financial institutions are an important part of the financial landscape. These institutions deal with financial concerns such as risk management, time value of money, financial intermediation, providing short-term and long-term financing to individuals and businesses, payment processing, and many other activities critical to the financial environment.
  • Banks and other similar financial institutions are among the primary employers in the field of finance.
  • While we will deal with some issues that are of concern to these financial institutions (time value of money, risk/return analysis, types of financial instruments, etc.), this class will not be primarily focused on banking-related issues.

Investments

  • One of the common images associated with finance is the stock market. The field of investments deals with stocks, bonds, options, mutual funds, futures, and many other financial instruments.
  • Some of the key considerations in the field of investments include valuation analysis, risk/return analysis, diversification, and fit (by fit we mean that what may be a good investment for one individual may be a poor investment for someone else due to each person’s unique set of investment objectives.)
  • There are many career paths related to investments including stock analyst, fixed-income analyst, portfolio manager, trader, etc. These careers tend to be very competitive, demanding, and offer the potential for high income.

Personal Finance

  • Personal finance deals with a variety of financial decisions made on the personal level. This includes areas such as retirement planning, insurance, personal budgeting (e.g. can I afford a new house or new car?), and any other financial decision that a person makes.
  • While personal finance is not the primary topic of this course, it is an important issue for everyone AND overlaps with many of the main themes (time value of money, diversification, valuation analysis, etc.) that we will talk about in this class. Due to its importance and overlap with our primary focus, we will spend a fair amount of time this semester discussing personal finance issues.
  • The most common career path associated with personal finance is the financial advisor/planner. A financial advisor works with individuals to help them achieve their personal financial goals. Financial planning is an expanding field and is consistently rated very high in job ranking evaluations due to its combination of potential income and job satisfaction.

Corporate Finance

  • The terms Corporate Finance, Business Finance, and Managerial Finance are often used interchangeably and refer to the field of finance dealing with financial decision making from a business perspective.
  • Primary topics for corporate finance deal with raising capital (issuing stocks, bonds, or other forms of financing), paying dividends, maximizing value for shareholders, evaluating potential long-term investments that the firm will undertake (e.g. building a new warehouse), and managing the firm’s cash flows.
  • Students with a strong background in accounting are often among the top candidates for jobs in the field of corporate finance.

This textbook will touch on several of these topics (interested students may find more information about potential finance-related careers at the Careers-in-Finance site), but our primary focus is going to be on Corporate Finance. In order to do this, we must start by defining the concept of the corporation (firm).

Forms of Business Organization

business finance assignment pdf

Sole Proprietorship

A sole proprietorship is a business organization where the owner is a single person and is solely responsible for control of the business. While the owner can hire employees (and managers), it is ultimately the owner that is in charge. One important characteristic of a sole proprietorship is that, from a legal and tax perspective, there is no real distinction between the owner and the business. The owner is liable (legally and financially) for the actions and liabilities of the business. Also, the income is only taxed once (as opposed to being taxed at both the business and personal level).

Partnership

A partnership is structured much like a sole proprietorship except that now there are multiple owners. Again, there is no distinction between the owners and the business as they are all liable (legally and financially) for the actions and liabilities of the business. Also, like in a sole proprietorship, the income is only taxed once. In practice, there are different types of partnerships (general vs. limited vs. limited liability). The general partnership is what is described above. A limited partnership involves at least one general partner to manage the company and take on the risk. The limited partners are passive investors. Finally, a limited liability partnership allows partners to limit their legal (limited to each partner’s behavior) and financial liability (limited to the assets of the business) while still maintaining the tax structure of a general partnership. Note that specifics of partnership law vary by country and by state.

Corporation

A corporation is a firm owned by many individuals (stockholders) who in most cases have little input in operating the firm. A fundamental component of the corporate form of ownership is the separation of ownership from the process of managing the firm. The owners (stockholders) elect a board of directors who are responsible for hiring management and overseeing the direction of the firm’s operations. Corporations account for the bulk of business activity in the US because most large firms are organized as corporations. Specifically, while approximately 17% of business tax returns were filed by corporations, they accounted for about 82% of total revenues by businesses and 62% of taxable income according to IRS SOI Tax Stats in 2015 . Because most large firms are organized as corporations, accounting for the bulk of business activity, and corporations are more complex, we will focus on the corporation in our coverage of finance this semester.

Advantages and Disadvantages of Corporations

Advantages of Corporations

Limited liability.

Due to the separation between business and the owners, stockholders are typically not liable for anything beyond their initial investment. When buying a share of stock and becoming an owner in a corporation, an individual can lose his entire initial investment if the company goes bankrupt, but nothing beyond that. Remember that this is not the case for sole proprietorships or general partnerships.

Easier access to capital

Corporations have access to the capital markets by issuing shares of stock or issuing bonds. This makes it easier to raise large sums of money for expansion or a multi-year, profitless startup that is anticipated to generate significant profits after the startup stage. Sole proprietorships and partnerships find it much more difficult to raise significant amounts of capital. Snap, Inc. (Snapchat) is an example of a limited liability corporation that recently became a publicly traded corporation via an Initial Public Offering, IPO. The Snap IPO was offered March of 2017 with an original price of $17 per share. Upon opening, demand for the popular IPO pushed the price to $24 per share (a 44% increase) giving the company a $32 billion dollar valuation. Despite several red flags investors continued to purchase Snap stock. The company had yet to see an operating profit, losing $500 million in 2016 and $372 million in 2015, and its net worth for 2016 was a mere $1.5 billion. Over the following few months the stock price gradually fell, trading significantly below its original offering price of $17 per share (all the way down to about $5 per share in Dec. 2018).  As of January 2021, Snap is trading for around $50 per share, lost just over $1 billion in 2019 and is worth over $70 billion. See the current price of Snap .

Ability to Diversify Ownership

Corporations allow individuals to own multiple businesses without having expertise in all (or even any) of these businesses. This allows an investor (owner) to reduce her risk and take advantage of opportunities that would not be accessible without corporations. The chance of an investor owning multiple businesses in different industries as a sole proprietorship is minut (due to time, capital and expertise issues). Alternatively, it is easy for an individual to invest $5000 into a mutual fund and become a part owner of hundreds or thousands of different businesses.

Disadvantages of Corporations

Higher start-up costs and higher levels of regulation.

Because there is a separation between the owners and the business, there are higher regulatory costs associated with keeping owners informed about business operations. Publicly traded corporations must follow SEC guidelines pertaining to registration and reporting (such as audited annual and quarterly reports) that are costly. According to a report by Protiviti in 2016 , the average firm spent between $1,113,000 and $1,442,000 in internal compliance costs to comply with Sarbanes-Oxley regulations. This is just one of the regulatory costs associated with being a corporation. These expenses lower the profitability of the company, but may be necessary to protect shareholders.

Double-taxation

Because the owners and the business are treated as two separate entities under the corporate form of ownership, both are taxed. The business must pay corporate income taxes on any income it makes. When investors make money through dividends (a distribution of corporate profits to owners) or through capital gains (an increase in the value of a share of stock) these are taxable. The current tax code taxes dividend income and long-term capital gains at a lower rate than ordinary income which substantially reduces (but does not eliminate) the impact of double-taxation. Given the volatile nature of tax codes, the impact of double-taxation is likely to fluctuate over time.

Agency Costs

This topic will be discussed in more detail later, but essentially, it is the idea that the owners of the company are not handling the decision-making. Therefore, there is the potential for the decision-makers to run the firm more in their own self-interest rather than in the best interest of the owners (shareholders).

While our focus will be on the corporation, many of the same ideas apply to other types of business organizations (such as sole proprietorships, partnerships – limited or general, S corporations and limited liability companies) as well as personal financial decisions.

Stocks vs. Bonds

The two primary sources of financing for corporations are stocks (equity) and bonds (debt). These are essential financial instruments that we will discuss in depth throughout the semester. Let us introduce the basic characteristics of these securities (a “security” is just a generic name for a financial instrument) now.

Stocks are a form of ownership (equity) in a corporation. When you own a share of stock, you are actually a part-owner of the corporation. Large corporations have several million (or in some cases billion) shares outstanding, so when an individual owns 100 shares they own a very small fraction of the firm. For example, Exxon Mobil had 4.23 billion shares outstanding in January 2021, while Amazon had 501 million and Winnebago had 33.6 million at that time. As an owner, you are entitled to a piece of the company’s profits (on a pro-rated basis equivalent to the percentage of ownership). The firm can choose to distribute those profits back to shareholders in the form of dividends or reinvest them back into the company. Sometimes firms will engage in buying back shares of their own stock as a substitute (or in addition to) dividends as a way to return profits to shareholders. We need to be careful because there are other reasons why firms may engage in buybacks, but while the COVID pandemic of 2020 saw companies cut dividends and buybacks, they were still quite strong . When firms reinvest the profits back into the company instead of paying them out as dividends, the value of the firm should increase (assuming the profits are reinvested wisely) which will result in capital gains. Thus, your return from owning stock can come from two sources — dividends and/or capital gains. Because the dividends and capital gains essentially represent your portion of the company’s profit, they can fluctuate dramatically over time. Dividends represent the portion of the profit that is CURRENTLY being paid out while capital gains are dependent on investors’ expectations of FUTURE profits.

Stocks

Some companies expand rapidly and are extremely successful leading to high returns. Others struggle (or even go bankrupt) and lead to negative returns. As such, the returns associated with stock ownership are highly volatile and risky. Because investors are risk-averse (a concept we will introduce shortly), stocks must generate higher expected returns than safer investments (like bonds) in order to attract investor interest. Note that this does not mean that any individual stock (or stocks in general) WILL generate a higher return, only that its EXPECTED return will be higher.

A final issue associated with stocks is that there is no maturity date to stock ownership. When you buy a stock, you own it until you decide to sell or the company goes bankrupt. Theoretically, the timeline for this type of security is potentially infinite. However, in practice, we find that publicly traded companies have a much more finite lifespan of approximately 15 years. In the article, Where Do Firms Go When They Die the author discusses this relatively short lifespan. Note that this refers to the stock itself, not the investor’s holding period which may be as short as a few seconds or as long as several decades.

Stock Summary

  • Ownership (equity)
  • Variable cash flow (return) stream — dividends and capital gains
  • Higher risk and (on average) higher returns
  • Potentially infinite time horizon

Bonds are a form of debt. When you buy a bond, you are lending the issuer money (in addition to corporations, governments – federal, state local and international – also are large issuers of bonds). The loan is structured so that the bondholder (typically) receives a fixed interest payment (referred to as a coupon payment) every six-months until the bond matures. At maturity, the bondholder receives the last coupon payment and the par (or maturity) value. Unlike dividends (which firms can increase, decrease, or discontinue at their discretion), promised coupon payments on bonds must be made to bondholders on time or the company can be forced into bankruptcy. Bondholders are first in the priority of payments and must receive their promised payments before the stockholders get anything. Due to this priority of claims, the fixed cash flow stream (coupon payments and maturity payment), and the fixed time horizon, bonds are considered lower risk than stocks. Given this lower risk, bonds will typically have lower expected returns (note – there can be exceptions where the bond of a firm that is exhibiting financial stress may be riskier and have a higher expected return than the stock of a large, stable company). Again, a lower EXPECTED return does not mean a lower return for any particular bond or for bonds in general in a particular year. In any given year, bonds can earn higher returns than stocks, but typically, over longer periods of times, stocks usually earn higher returns than bonds.

Interested students can compare historical returns for the S&P 500, 3-month Treasury bills and 10-year Treasury bonds on a data page by Aswath Damodaran . Since 1928, stocks (as measured by the S&P 500) have had annual returns that are about double that of 10-year Treasury bond (bonds issued by the US Federal Government). Alternatively, the volatility of annual returns over this same time-period has been almost three times as high for the S&P 500. Note that the higher return of stocks, significantly understates the benefit over this time period if one is not aware of the power of compounding. Specifically, $100 invested in stocks at the start of 1928 grew to $502,417 by the end of 2019. The same $100 invested in 10-year Treasury bonds over the same time grew to $8,013. In other words, while the average return was about twice as high for stocks (9.71% vs. 4.88%), the total wealth accumulation was over 62 times as high during this time frame.

Bond Summary

  • Debt (loan)
  • Fixed cash flow stream — coupon and maturity payments
  • Lower risk and (on average) lower returns
  • Fixed time horizon

Goal of the Financial Manager

The goal of the Financial Manager is to Maximize the Shareholder Wealth (side note — sometimes this is referred to as Maximizing Firm Value since increasing the value of the firm increases shareholder wealth.)

  • The Magnitude of Expected Cash Flows
  • The Timeliness of Expected Cash Flows
  • The Riskiness of Expected Cash Flows

The above idea is a central theme that will underlie everything we do this semester!

Key Points regarding the Primary Goal of the Financial Manager

Note that in the 3 factors impacting firm value listed above we use cash flows NOT earnings (net income). While there are many similarities between earnings and cash flows, they are not the same. We should always focus our attention on cash flows instead of earnings. Cash flows are considered more important than earnings for three basic reasons:

  • The accrual-based approach of net income accounting can distort the timing of when cash is received or spent. Time value of money recognizes that money spent today is more costly than the same money spread out over years. Therefore, something like depreciation may understate the financial cost of owning assets.
  • Generally Accepted Accounting Principles (GAAP) or International Accounting Standards (IAS) allow corporations some flexibility in how they account for revenues and expenses. Firms that choose to aggressively apply GAAP/IAS may mislead shareholders by reporting artificially high earnings. Cash flows are harder to manipulate than net income (earnings).
  • Cash is the life-blood of a business. Ultimately, it doesn’t matter if the firm is profitable on an EARNINGS basis if it isn’t generating enough cash to pay its employees, suppliers, creditors, etc. The firm needs to generate positive cash flows in order to maintain its operations.

The word Expected is a critical component of the three factors. While what has happened in the past is not irrelevant, the relevance is based on how it might impact future cash flows. Investors base their valuation decisions on the future of the firm. When analyzing stock price changes to information, it is always essential to consider what the new information is RELATIVE TO what expectations were. An analogy would be to compare two students in junior high. The first student normally gets As in her classes while the second student normally gets Cs. Both come home with several Bs on their report card. While both received the same grades, one will likely result in disappointment while the other will likely be celebrated. The difference is not the performance, but the performance relative to expectations. With stocks, new information causes investors to revise their expectations for future cash flows to the firm. If the new information is better than previously expected, investors revise cash flow forecasts upward (and the stock price goes up). If the new information is worse than previously expected, investors revise cash flow forecasts downward (and the stock price goes down).

The three key elements (magnitude, timeliness, and riskiness) are not individual goals. Everything else being equal, higher cash flows are preferred to lower cash flows, less risk is preferred to more risk, and earlier receipt (later payment) of cash flows is preferred to later receipt (earlier payment). However, things are rarely equal. Increasing the magnitude of cash flows usually means taking on higher risks. Less risk usually means lower expected cash flows. Thus, we need to keep the primary goal (maximize firm value) in mind and realize that the interaction of risk, magnitude, and timeliness are more important than any one separately.

The concept of maximizing firm value is not specific to finance. The purpose of marketing, internal accounting, personnel decisions, production, etc. is to maximize firm value. When an individual is hired in any field, the rationale for that decision is that the company plans for that person to directly or indirectly increase its value. If you are an employee of a corporation and are not adding value, what reason do the shareholders have to pay your salary?

Risk Aversion

Dice over newspaper

Does adequate seem like a vague word? It should, because it is intentionally vague. The reason for this is because people have different levels of risk aversion depending on their personality, their age, their income, and several other factors. Some people are highly risk averse (needing significantly higher expected return to take on a little more risk) while others are only mildly risk averse (needing only slightly higher expected return to take on significantly more risk). To summarize:

  • We will assume all investors are risk averse
  • Risk aversion implies investors do not like risk
  • If two investments have the same expected return, investors will choose the one with the least risk
  • Risk aversion is NOT risk minimization, investors will take on more risk if they are adequately compensated for that risk
  • The level of risk aversion varies from individual to individual

Social Responsibility and Ethics

Social responsibility.

Social Responsibility refers to the concept that businesses should be actively concerned with the welfare of society. Examples may include establishing scholarship funds, contributing to the arts, or “matching” employee’s contributions to charities.

Ethics refers to standards of conduct or moral behavior. Examples may include exceeding minimum safety requirements for employees, abiding by (or exceeding) regulations regarding environmental issues, honoring not just the letter, but the spirit of contracts or verbal agreements with customers and suppliers.

Social Responsibility and Ethics are NOT inconsistent with the maximization of firm value. While there is a cost to engaging in ethical and socially responsible behavior, there are often benefits in goodwill and public relations that may more than offset those costs. There is substantial evidence that engaging in Social Responsibility and Ethics is highly consistent with maximizing shareholder wealth. A study by Margolis, et al (2009) , reviewed 251 other studies examining social responsibility and firm performance. They find a consistent pattern that social responsibility is correlated with firm performance. Specifically, the overall mean correlation is 0.13 (indicating a small, positive relationship). In addition, 28% of the studies reveal a statistically significant, positive relationship, 59% reveal no relationship, and only 2% suggest a statistically, negative relationship (with about 10% not reporting a sample size to make statistical significance impossible to measure). This implies that the overwhelming evidence suggests that corporations behaving in a manner consistent with social responsibility and ethical behavior are likely to either benefit financially or not experience any noticeable financial downside to doing so. In other words, companies that do the right thing will either generate additional financial rewards to shareholders or, at the worst, not cost their shareholders.

However, we must remember that while social responsibility is consistent with our primary goal (maximizing shareholder wealth) it is not the primary goal in and of itself. While it seems wrong to say that a corporation can spend too much money on trying to improve the welfare of society, keep in mind that the owners of the corporation are the stockholders. When a corporation writes a large check to a charitable organization, essentially the managers of the corporation are deciding where and how to spend the stockholders’ money. It would be fairer to let those stockholders decide how to allocate their money.

For an example of some firms that rate high in social responsibility and ethics, take a look at Business Ethics List of 100 Best Corporate Citizens .

International Issues

One critical aspect to maximizing firm value is recognizing that business is global not national. Census for January 2021 shows there were 330 million people in the US and 7.7 billion people on the planet. Marketing solely to the US excludes over 95% of potential customers. While not every customer has equal purchasing power, it makes no sense to exclude 95% of your potential customers. From an economic standpoint, the majority of economic activity is also outside the US. According to Worldbank GDP Ranking , in 2019 the US had GDP of $21.4 trillion while global GDP was $87.8 trillion. This means that 76% of economic activity occurs outside the US (up from 70% in 2005). In addition to our customers, many of our competitors and/or suppliers may be based internationally. Therefore, if we ignore the global aspects of business, we are not maximizing firm value.

If we think of international business from the three aspects of maximizing shareholder wealth (magnitude, timeliness, and riskiness of expected cash flows), we can see that international business is likely to have a significant, positive impact on the magnitude of expected cash flows. The timeliness is likely to be slightly slower, but not nearly as significant. The riskiness can go either way. On one hand, international operations introduce new risk factors (political, cultural, exchange rate, etc.). On the other hand, sometimes international operations can help diversify away (a topic for a later chapter) some of our risk. How do we know that international business is an essential element to maximizing shareholder wealth? S&P Indices report, In most years the S&P 500 firms that report a breakdown of foreign revenues report between 40-50% of their revenues from foreign countries. Since these are among the largest firms in terms of market values, clearly foreign revenues are a key component of maximizing firm value.

Agency Relationships

An Agency Relationship exists any time one or more people (the principals) hire another person (the agent) to perform a service and then delegates decision-making authority to that person. The central issue with agency relationships is potential conflict of interest between the principal and the agent or between two or more groups of principals.

Agency problems can cause difficulties in maximizing firm value. The major agency conflict we will focus on is between managers and stockholders (owners). Stockholders hire managers under the goal of maximizing firm value as doing so will maximize the wealth of shareholders. However, the manager may operate under the goal of maximizing his happiness instead of firm value. This may take the shape of overspending on perks (office decorations, company jets, etc.) or on limiting risk in order to protect job security, even at the expense of favorable risk-adjusted return opportunities. There are many ways to try to control for agency costs, including:

The Threat of Firing

While most people understand the threat of being fired, this is not an overwhelming threat to most top managers (although it is more credible for other employees of the firm). Many Chief Executive Officers (CEOs) get rich compensation packages (Golden Parachutes) even if they are forced out of their position. Also, there are some instances where the Board of Directors (the people responsible for hiring and paying the CEO) may be “friendly” to the CEO. In many cases, the CEO is also the Chairperson of the Board of Directors.

The article, The Top 20 CEOs With Even Bigger Golden Parachutes than Marissa Mayer’s , list the CEOs who hold the largest Golden Parachutes in the S&P 500.

The Threat of Takeover

Poison Pills

Influence of Large Shareholders

This is a relatively new form of Corporate Governance that is gaining prominence. Activist investors may pressure management to run a more efficient operation. If a shareholder with a large stake in the firm creates enough pressure on management and the board of directors, changes to the firm’s strategies and/or operations may occur.

Compensation Packages

The best way to make managers interested in maximizing value is to pay them based on their stock performance. This is often accomplished through payment with stock options (the right to purchase shares at a fixed price even if the stock goes higher). Also, many CEOs own significant amounts of stock in the company they work for. Caution must be exercised that compensation is based on maximizing value and not other factors. For example, compensation based on the size of the company’s assets may create incentives to make investments that increase assets without adding value. Also, compensation based on meeting sales targets may get met by selling items for a loss (which reduces firm value). Finally, stock options may be the most popular way of trying to align the interests of shareholders and managers but they also have some serious flaws. Specifically, the way many options packages are granted they reward short-term fluctuation in the price of the stock more than long-term value creation. There have also been issues related to the timing of option compensation that has acted more as a wealth transfer to executives rather than an incentive. Compensation packages must be carefully designed to align the interest of management with the objective of creating shareholder wealth in order to minimize agency conflicts.

Another agency conflict arises between the two principals, the stockholders and bondholders. Because of the difference in the way stockholders and bondholders are compensated, their attitudes towards a “worthwhile” investment may be different. This can lead to conflicts between which projects to undertake. Generally, bondholders prefer low-risk investments (as their potential return is limited) and stockholder prefer higher risk investments (assuming the higher risk is compensated by higher return).

The better we can control these agency problems, the better our chances of maximizing firm value. The term corporate governance is used to describe the policies that firms have in place to better align agency issues. Two studies that address this are Gompers, et al, 2003 and Cuñat, et al, 2010 ). These studies provide evidence that improving corporate governance results in higher shareholder wealth.

Key Takeaways

Finance deals with the allocation of capital in order to optimize the risk-adjusted return earned on that capital. While the concept applies to both personal and business oriented decisions, the focus of this course will be first on corporations and secondarily on personal issues. The corporation is a form of business organization that separates out management from ownership and accounts for the bulk of business activity within the U.S. The primary objective of financial management within the corporation is to maximize shareholder wealth. This is accomplished by focusing on the magnitude, riskiness and timeliness of expected cash flows. Three larger issues that influence this goal are social responsibility and ethics, international business operations, and agency relationships.

Define a corporation.

Explain the concepts of limited liability and double-taxation and how they relate to the corporate form of ownership.

One of the “disadvantages” of the corporate form of ownership is the higher regulatory cost. One of the large costs facing corporations is the cost of preparing and verifying financial statements. Who ultimately pays for this and does it benefit shareholders? Discuss.

What are the two primary instruments corporations issue to raise money? Explain the primary characteristics of each.

What is the goal of financial management? What 3 elements are essential to meeting this goal?

Why should we concentrate on Cash Flows instead of Earnings Per Share?

One of the key assumptions in finance is that people are risk averse. What do we mean by risk aversion? Does this seem to be a valid assumption? Explain.

Assume that for $1 you could buy a coin flip that would pay you $2 for heads and nothing for tails. If you are risk averse, should you take the coin flip? What if the coin flip cost you $0.90 instead of $1? What is the lowest price that YOU would take to accept the coin flip and why might this be different for others?

How does globalization relate to the concept of maximizing firm value?

Question 10

Explain what is meant by social responsibility and ethics? Discuss how these issues relate to the primary goal of the firm?

Question 11

Define an agency relationship. What major agency problem do corporations encounter? What can be done to help minimize this problem?

Question 12

One of the more controversial issues facing corporations today is the issue of executive compensation. Make an argument for the current state of executive compensation being okay and an argument in favor of regulation to reduce executive compensation. Base your arguments on the concept of shareholders and wealth maximization. After considering this would you be in favor of regulations?

SOLUTIONS to CH 1 Exercises

Cuñat, Vicente, Gine, Mireia and Guadalupe, Maria, The Vote is Cast: The Effect of Corporate Governance on Shareholder Value (February 17, 2010). Available at SSRN: http://ssrn.com/abstract=1555961 or http://dx.doi.org/10.2139/ssrn.1555961

Gompers, Paul A., Ishii, Joy L. and Metrick, Andrew, Corporate Governance and Equity Prices. Quarterly Journal of Economics, Vol. 118, No. 1, pp. 107-155, February 2003. Available at SSRN: http://ssrn.com/abstract=278920

Margolis, Joshua D. and Elfenbein, Hillary Anger and Walsh, James P., Does it Pay to Be Good…And Does it Matter? A Meta-Analysis of the Relationship between Corporate Social and Financial Performance (March 1, 2009). Available at SSRN: https://ssrn.com/abstract=1866371 or http://dx.doi.org/10.2139/ssrn.1866371

Attributions

Revised Image: Close-up of Hand Holding Pencil over White Background by Lum3n.com licensed under CC0

Image: Stock Exchange World Economy Bull by Geralt licensed under CC0

Image: Dice over Newspaper Profit by FreeGraphicToday licensed under CC0

Revised Image: Pills Medicine capsule Health by OpenClipart-Vectors licensed under CC0

Business Finance Essentials Copyright © 2018 by Dr. Kevin Bracker, Dr. Fang Lin and Jennifer Pursley is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License , except where otherwise noted.

Share This Book

Browse Course Material

Course info.

  • Prof. Peter Wysocki

Departments

  • Sloan School of Management

As Taught In

  • Financial Economics

Learning Resource Types

Business analysis using financial statements, assignment1.pdf.

Valuation example: DELL Computer

MIT Open Learning

InfoBooks.org

25+ Financial Books for Free! [PDF]

* If you have doubts about how to download free books from InfoBooks, visit our guide to downloading books .

Financial Books in PDF

The behavior of money is an aspect of economics relevant to the management of resources in the world. From the smallest to the largest sphere, the use of money deserves attention. If you want to educate yourself on this topic, we recommend that you take a look at our collection of books on finance in PDF format.

Knowing how to use money wisely is always a good idea, whether it is the money of a company, a family or the state itself. Whether you are interested in this topic as a subject to study or to improve your own money management, our finance books will serve you for both purposes.

Finance is a branch of economics that deals with the study of money management . The control of expenses, income, investments and savings is the responsibility of this discipline. In this sense, having knowledge of this subject helps to make intelligent decisions about financial resources.

This area of economics has developed resources and tools for this decision-making to bring benefits, both in individual matters, such as what goods to buy, and in state matters, such as project financing.

Among the aspects that finance takes into account are: the profitability of investments , debt management, control of the loss of money due to inflation, risk assessment of tangible and intangible assets, among others.

There are basically four types of finance: corporate finance (management of corporate resources), personal finance (management of the financial resources of families and individuals), public finance (management of government resources) and international finance (study of international financial transactions).

We invite you to take a look at more than 25 finance books in PDF format , available and free to access.

Banking Finance Books

In order to contribute to the adequate management of resources, both personal and corporate, financial institutions offer tools through monetary intermediation, where they use the money deposited to grant it to other economic agents in the form of loans.

These instruments are known as accounts, debit and credit cards, mortgages, term investments, among others, which are used by customers in order to meet their specific financing needs and obtain development opportunities.

This economic world is known as banking finance , which studies mercantile movements offering users the optimal use of their financial assets, managing savings, providing advances for productive projects and participating in the payment system to settle commercial transactions.

Principles for the Management of Credit Risk

BIS - Bank for International Settlements

Basics of Finance

Gábor Kürthy, József Varga, Tamás Pesuth

Reading in Banking and Finance

Ammr Khalaf

How Unique are US Banks? - The Role of Banks in Five Major Financial Systems

Andreas Hackethal

Stock Market Finance Books

Within the administrative world, companies apply different strategies with the objective of maximizing their resources to obtain a better financial profitability, one of these mechanisms are the transactions they carry out in the stock market in different parts of the world.

These movements are called stock market finance and correspond to the operations that allow the purchase and sale of shares, securities and bonds by organizations, either physically or electronically, to promote investment opportunities and the economic growth of each institution.

Through these negotiations, whose behavior is different from banking, investors seek to guarantee the recovery of their money, since this market offers a regulatory environment that guarantees legality, transparency and security.

Financial Investments and Stock Markets

Capital Market Authority

Stock Market Development and Corporate Finance Decisions (Article)

Asli Demirgüç-Kunt, Vojislav Maksimovic

An Introduction to Financial Market Part-I for Class XI

Mr. Siddharth Bagri, Mr. G.C. Sharma, Mr. Ashok Wadhwa

Financial Markets

Valdone Darskuviene

Handbook on Basics of Financial Markets

National Stock Exchange if India Limited

Behavioral Finance Books

The correct management of money depends on the financial education received at home; however, it is a subject that is also observed from a psychic perspective, where the behavior of the individual and the causes that drive him/her to make decisions are analyzed.

Coming from the union between psychology, traditional economics and neuroeconomics, this study is known as behavioral finance , which evaluates the influence of emotions and feelings on people’s financial behavior.

In this sense, it analyzes the rationality of economic agents, the risk of the operations they carry out and the effect this has on the markets. In conclusion, this science is in charge of exploring the origin of the financial failures of subjects, based on their reasoning and affections.

Self Learning Material of Behavioural Finance

Sandeep Kour Tandon

Behavioral Finance Foundations for Investor

Michal Stupavsky

Behavioral Finance

Rajdhani College of Engineering & Management Welcomes You

Jay R. Ritter

Corporate Finance Books

Business management is usually subject to change, as organizations seek to employ new strategies that favor their survival, expansion and growth, and in order to carry them out, it is necessary to make economic decisions.

These decisions are issued once the analysis of the corresponding variables has been carried out through the use of different tools, with the objective of maximizing shareholder value through the increase of capital, the subscription of negotiations and the evolution of the institution.

Corporate finance books describe guidelines that help in the evaluation of the elementary aspects that must be considered to decide the actions to be taken within the company, in order to find solutions, make it more sustainable and increase its production and value.

Training Module on Corporate Finance Management

Lalitha Mahal Road

Corporate Finance (Study notes)

Zhipeng Yan

Corporate Finance. What is it? (Presentation)

Aswath Damodaran

Finance Books for Young Adults and Teens

At a young age, the individual is still in the developmental stage, in other words, in full initiation of life. That is why parents worry that their children are not mature enough to manage the money they are given to cover their college expenses.

It is therefore essential that they learn to manage their expenses responsibly, opening the way to independence and using their decision-making capacity. This training can be obtained by consulting finance books for young adults and teens.

The literature in these texts offers the main suggestions and recommendations that teens should put into practice to manage their resources, such as learning to spend appropriately, being a responsible consumer, saving regularly, among others.

Financial Education for Youth

Young People and Money

Azure Media Player

Financial Readiness for Youth A Review of the Literature and Programs in the United States

Lynne M. Borden, Wilfrido Arias, Jr., MEdLeslie Bosch

Teens and Personal Finance Survey (Article)

Junior Achievement USA

Finance Books for Children

Just like good manners, basic money management is a process that is learned at home, with knowledge that is transmitted from parents to children, where they are taught the value of this asset, the correct way to obtain it and how to manage it.

Financial education for children is of great importance because it fosters responsibility in the youngest members of the household, where they learn to value the effort involved in obtaining resources, how to distribute them according to their needs and the habit of saving.

With the finance books for children , they will learn that to acquire money they only have to work, and they will also understand that it is only useful to pay for services, studies, buy food, clothes, goods and to pay for healthy entertainment; therefore, they will be prepared to differentiate between what is cheap and what is not.

The Complete Money Workbook

The Financial Literacy Committee of the New York State Society of CPAs Nassau Chapter

The Ultimate Online Financial Literacy Resource for Teaching Kids about Money

Life and a Budget - Better Finances. Carefree Living

Teaching Children Money Management

Melanie D. Jewkes

Finance Books for Couples

Life as a couple, in addition to love, patience, respect and tolerance, requires individual goals that go hand in hand, along with the establishment of rules to protect the common patrimony, based on transparency about the income and debts that each one has.

The correct management of the couple’s finances is necessary to reduce the number of conflicts in the economic area of the relationship, for this it is important to establish priorities and responsibilities regarding the coverage of expenses, security and emergencies of the new family.

Likewise, it is essential to follow up on financial obligations, allocate a percentage of resources to a savings fund, and plan for the short, medium and long term, among other aspects. It is as simple as working together to acquire that dream home.

Couples financial management and marital quality: A phenomenological inquiry

Emily Sorenson

Control over Money in Marriage

Frances Woolley

Marriage and Money How do we combine our finances? (Presentation)

Kansas State University

Money and Marriage: A Spending Plan (Article)

Josephine Turner, Nayda I. Torres, Vervil Mitchell

Financial Administration Books

In the field of economic sciences, there is a discipline that is in charge of employing strategies, techniques and methods with the objective of exercising the correct management of money, both to maximize the capital of a company and to teach the individual to establish the order of his own resources.

This area is known as financial administration, and is the science that seeks to optimize the finances of organizations to achieve their objectives, as well as to increase profitability and administrative efficiency.

Likewise, its application in daily life helps to plan, control, produce and direct personal accounts, in order to acquire responsibility and commitment to promote conscious consumption, learn to save and forge greater well-being.

| To access the collection of books on Financial Administration we invite you to visit: Free Financial Administration Books [PDF]

Personal Finance Books

Managing money is not a difficult task, however, there are people who have difficulties when it comes to optimizing their resources according to the different obligations and responsibilities they have at home, as well as the basic needs, payment of services, rent, among other expenses.

In the personal finance books any individual will find a guide to give the proper management to their income and learn to establish priorities in their lives, such as protecting their health, investing in a college career, complying with taxes, having liquidity, among others.

In addition, you will learn the methods and tools to carry out this process, such as banking instruments (accounts, debit and credit cards, funding, etc.), investments and insurance (life and accident insurance).

| To access the collection of books on Personal Finance we invite you to visit: Free Personal Finance Books [PDF] .

Well, this was our collection of Finances books in PDF format. We hope you liked it and find your next book!

If you found this list useful, don’t forget to share it in your social networks. Remember that «Sharing is Caring».

Do you want more Business and Investment books in PDF format ?

Business Books

| Accounting Books

| Advertising Books

| Agribusiness Management Books

| Audit Books

| Books about Benchmarking

| Books about Corporate Image

| Books about Efficiency

| Books about Organizational Climate

| Books About Procedure Manuals

| Books about SWOT

| Books about Teamwork

| Books on Inflation

| Branding Books

| Budgeting Books

| Business Administration Books

| Business Plan Books

| Business Strategy Books

| Consulting Books

| Continuous Improvement Books

| Costs Books

| Cryptocurrency Books

| Digital Marketing Books

| Dropshipping Books

| Economics Books

| Entrepreneur Books

| Financial Accounting Books

| Financial Management Books

| Forex Books

| Gastronomic Management Books

| Hospitality Industry Books

| Human Resources Books

| Innovation Books

| International Trade Books

| Inventory Books

| Investment Books

| Kaizen Books

| Logistics Books

| Manufacturing Processes Books

| Market Research Books

| Marketing Books

| Negotiation Books

| Networking Books

| Organizational Designs Books

| Organizational Development Books

| Personal Branding Books

| Project Management Books

| Public Relations Books

| Quality Control Books

| Real Estate Books

| Sales Books

| Six Sigma Books

| Supply Chains Books

| Trading Books

| Training Books

| Warehouse Books

Alternative Therapy Books

Alternative Therapy

Animal Books

Art & Photography

Biology Books

Children's

Computer Science Books

Computer Science

Engineering Books

Engineering

Esoteric Books

Esotericism

Food & Drinks Books

Food & Drinks

French Books

French Books

History Books

Mystery and Thriller

Mythology Books

Portuguese Books

Psychology Books

Self Improvement

Short Stories

Short Stories

Spanish Books

Spanish Books

Sports Books

HELP US SPREAD THE HABIT OF READING!

InfoBooks on Facebook

InfoBooks is a website to download free books legally.

LINKS OF INTEREST:

Ask a question from expert

Financial Management Assignment Sample PDF

Added on   2021-02-15

   Added on  2021-02-15

Financial Management Assignment Sample PDF_1

End of preview

Want to access all the pages? Upload your documents or become a member.

IBS on Financial Report: Functions of Finance Management and Sources of Finance lg ...

Sources of finance for unincorporated and incorporated businesses lg ..., importance of financial management in business | desklib lg ..., sources of business finance pdf lg ..., concept and importance of financial management in applied business finance lg ..., purpose of financial management (pdf) lg ....

Assignment 3-Jorge Mendoza5

Artificial Intelligence Computing Leadership from NVIDIA

Press Release Details

Nvidia announces financial results for fourth quarter and fiscal 2024.

  • Record quarterly revenue of $22.1 billion, up 22% from Q3, up 265% from year ago 
  • Record quarterly Data Center revenue of $18.4 billion, up 27% from Q3, up 409% from year ago
  • Record full-year revenue of $60.9 billion, up 126%

SANTA CLARA, Calif., Feb. 21, 2024 (GLOBE NEWSWIRE) -- NVIDIA (NASDAQ: NVDA) today reported revenue for the fourth quarter ended January 28, 2024, of $22.1 billion, up 22% from the previous quarter and up 265% from a year ago.

For the quarter, GAAP earnings per diluted share was $4.93, up 33% from the previous quarter and up 765% from a year ago. Non-GAAP earnings per diluted share was $5.16, up 28% from the previous quarter and up 486% from a year ago.

For fiscal 2024, revenue was up 126% to $60.9 billion. GAAP earnings per diluted share was $11.93, up 586% from a year ago. Non-GAAP earnings per diluted share was $12.96, up 288% from a year ago.

“Accelerated computing and generative AI have hit the tipping point. Demand is surging worldwide across companies, industries and nations,” said Jensen Huang, founder and CEO of NVIDIA.

“Our Data Center platform is powered by increasingly diverse drivers — demand for data processing, training and inference from large cloud-service providers and GPU-specialized ones, as well as from enterprise software and consumer internet companies. Vertical industries — led by auto, financial services and healthcare — are now at a multibillion-dollar level.

“NVIDIA RTX, introduced less than six years ago, is now a massive PC platform for generative AI, enjoyed by 100 million gamers and creators. The year ahead will bring major new product cycles with exceptional innovations to help propel our industry forward. Come join us at next month’s GTC, where we and our rich ecosystem will reveal the exciting future ahead,” he said.

NVIDIA will pay its next quarterly cash dividend of $0.04 per share on March 27, 2024, to all shareholders of record on March 6, 2024.

Q4 Fiscal 2024 Summary

Fiscal 2024 Summary

Outlook NVIDIA’s outlook for the first quarter of fiscal 2025 is as follows:

  • Revenue is expected to be $24.0 billion, plus or minus 2%.
  • GAAP and non-GAAP gross margins are expected to be 76.3% and 77.0%, respectively, plus or minus 50 basis points.
  • GAAP and non-GAAP operating expenses are expected to be approximately $3.5 billion and $2.5 billion, respectively.
  • GAAP and non-GAAP other income and expense are expected to be an income of approximately $250 million, excluding gains and losses from non-affiliated investments.
  • GAAP and non-GAAP tax rates are expected to be 17.0%, plus or minus 1%, excluding any discrete items.

NVIDIA achieved progress since its previous earnings announcement in these areas: 

Data Center

  • Fourth-quarter revenue was a record $18.4 billion, up 27% from the previous quarter and up 409% from a year ago. Full-year revenue rose 217% to a record $47.5 billion.
  • Launched, in collaboration with Google, optimizations across NVIDIA’s data center and PC AI platforms for Gemma , Google’s groundbreaking open language models.
  • Expanded its strategic collaboration with Amazon Web Services to host NVIDIA ® DGX™ Cloud on AWS.
  • Announced that Amgen will use the NVIDIA DGX SuperPOD ™ to power insights into drug discovery, diagnostics and precision medicine.
  • Announced  NVIDIA NeMo™ Retriever , a generative AI microservice that lets enterprises connect custom large language models with enterprise data to deliver highly accurate responses for AI applications. 
  • Introduced NVIDIA MONAI™ cloud APIs to help developers and platform providers integrate AI into their medical-imaging offerings. 
  • Announced that Singtel will bring generative AI services to Singapore through energy-efficient data centers that the telco is building with NVIDIA Hopper™ architecture GPUs.
  • Introduced plans with Cisco to help enterprises quickly and easily deploy and manage secure AI infrastructure.
  • Supported the National Artificial Intelligence Research Resource pilot program , a major step by the U.S. government toward a shared national research infrastructure.
  • Fourth-quarter revenue was $2.9 billion, flat from the previous quarter and up 56% from a year ago. Full-year revenue rose 15% to $10.4 billion.
  • Launched GeForce RTX™ 40 SUPER Series GPUs , starting at $599, which support the latest NVIDIA RTX™ technologies, including DLSS 3.5 Ray Reconstruction and NVIDIA Reflex.
  • Announced generative AI capabilities for its installed base of over 100 million RTX AI PCs, including Tensor-RT™ LLM to accelerate inference on large language models, and Chat with RTX, a tech demo that lets users personalize a chatbot with their own content.
  • Introduced microservices for the NVIDIA Avatar Cloud Engine , allowing game and application developers to integrate state-of-the-art generative AI models into non-playable characters.
  • Reached the milestone of 500 AI-powered RTX games and applications utilizing NVIDIA DLSS, ray tracing and other NVIDIA RTX technologies.

Professional Visualization

  • Fourth-quarter revenue was $463 million, up 11% from the previous quarter and up 105% from a year ago. Full-year revenue rose 1% to $1.6 billion.
  • Announced adoption of NVIDIA Omniverse ™ by the global automotive-configurator ecosystem.
  • Announced the NVIDIA RTX 2000 Ada Generation GPU , bringing the latest AI, graphics and compute technology to compact workstations.
  • Fourth-quarter revenue was $281 million, up 8% from the previous quarter and down 4% from a year ago. Full-year revenue rose 21% to $1.1 billion.
  • Announced further adoption of its NVIDIA DRIVE ® platform , with Great Wall Motors, ZEEKR and Xiaomi using DRIVE Orin™ to power intelligent automated-driving systems and Li Auto selecting DRIVE Thor™ as its centralized car computer.

CFO Commentary Commentary on the quarter by Colette Kress, NVIDIA’s executive vice president and chief financial officer, is available at https://investor.nvidia.com .

Conference Call and Webcast Information NVIDIA will conduct a conference call with analysts and investors to discuss its fourth quarter and fiscal 2024 financial results and current financial prospects today at 2 p.m. Pacific time (5 p.m. Eastern time). A live webcast (listen-only mode) of the conference call will be accessible at NVIDIA’s investor relations website, https://investor.nvidia.com . The webcast will be recorded and available for replay until NVIDIA’s conference call to discuss its financial results for its first quarter of fiscal 2025.

Non-GAAP Measures To supplement NVIDIA’s condensed consolidated financial statements presented in accordance with GAAP, the company uses non-GAAP measures of certain components of financial performance. These non-GAAP measures include non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP income from operations, non-GAAP other income (expense), net, non-GAAP net income, non-GAAP net income, or earnings, per diluted share, and free cash flow. For NVIDIA’s investors to be better able to compare its current results with those of previous periods, the company has shown a reconciliation of GAAP to non-GAAP financial measures. These reconciliations adjust the related GAAP financial measures to exclude acquisition termination costs, stock-based compensation expense, acquisition-related and other costs, IP-related costs, other, gains and losses from non-affiliated investments, interest expense related to amortization of debt discount, and the associated tax impact of these items where applicable. Free cash flow is calculated as GAAP net cash provided by operating activities less both purchases related to property and equipment and intangible assets and principal payments on property and equipment and intangible assets. NVIDIA believes the presentation of its non-GAAP financial measures enhances the user’s overall understanding of the company’s historical financial performance. The presentation of the company’s non-GAAP financial measures is not meant to be considered in isolation or as a substitute for the company’s financial results prepared in accordance with GAAP, and the company’s non-GAAP measures may be different from non-GAAP measures used by other companies.

About NVIDIA Since its founding in 1993, NVIDIA (NASDAQ: NVDA) has been a pioneer in accelerated computing. The company’s invention of the GPU in 1999 sparked the growth of the PC gaming market, redefined computer graphics, ignited the era of modern AI and is fueling industrial digitalization across markets. NVIDIA is now a full-stack computing infrastructure company with data-center-scale offerings that are reshaping industry. More information at https://nvidianews.nvidia.com/ .

Certain statements in this press release including, but not limited to, statements as to: demand for accelerated computing and generative AI surging worldwide across companies, industries and nations; our Data Center platform being powered by increasingly diverse drivers, including demand for data processing, training and inference from large cloud-service providers and GPU-specialized ones, as well as from enterprise software and consumer internet companies; vertical industries led by auto, financial, services and healthcare now at a multibillion-dollar level; NVIDIA RTX becoming a massive PC platform for generative AI enjoyed by 100 million gamers and creators; the year ahead bringing major new product cycles with exceptional innovations to help propel our industry forward; our upcoming conference at GTC, where we and our rich ecosystem will reveal the exciting future ahead; NVIDIA’s next quarterly cash dividend; NVIDIA’s financial outlook and expected tax rates for the first quarter of fiscal 2025; the benefits, impact, performance, features and availability of NVIDIA’s products and technologies, including NVIDIA AI platforms, NVIDIA DGX Cloud, NVIDIA DGX SuperPOD, NVIDIA NeMo Retriever, NVIDIA MONAI cloud APIs, NVIDIA Hopper architecture GPUs, NVIDIA GeForce RTX 40 SUPER Series GPUs, NVIDIA DLSS 3.5 Ray Reconstruction, NVIDIA Reflex, NVIDIA TensorRT-LLM, Chat with RTX, microservices for the NVIDIA Avatar Cloud Engine, NVIDIA DLSS, ray tracing and other NVIDIA RTX technologies, NVIDIA Omniverse, NVIDIA RTX 2000 Ada Generation GPU, NVIDIA DRIVE platform, NVIDIA DRIVE Orin and NVIDIA DRIVE Thor; and our collaborations with third parties are forward-looking statements that are subject to risks and uncertainties that could cause results to be materially different than expectations. Important factors that could cause actual results to differ materially include: global economic conditions; our reliance on third parties to manufacture, assemble, package and test our products; the impact of technological development and competition; development of new products and technologies or enhancements to our existing product and technologies; market acceptance of our products or our partners’ products; design, manufacturing or software defects; changes in consumer preferences or demands; changes in industry standards and interfaces; and unexpected loss of performance of our products or technologies when integrated into systems, as well as other factors detailed from time to time in the most recent reports NVIDIA files with the Securities and Exchange Commission, or SEC, including, but not limited to, its annual report on Form 10-K and quarterly reports on Form 10-Q. Copies of reports filed with the SEC are posted on the company’s website and are available from NVIDIA without charge. These forward-looking statements are not guarantees of future performance and speak only as of the date hereof, and, except as required by law, NVIDIA disclaims any obligation to update these forward-looking statements to reflect future events or circumstances.

© 2024 NVIDIA Corporation. All rights reserved. NVIDIA, the NVIDIA logo, GeForce, GeForce RTX, NVIDIA DGX, NVIDIA DGX SuperPOD, NVIDIA DRIVE, NVIDIA DRIVE Orin, NVIDIA DRIVE Thor, NVIDIA Hopper, NVIDIA MONAI, NVIDIA NeMo, NVIDIA Omniverse, NVIDIA RTX and TensorRT are trademarks and/or registered trademarks of NVIDIA Corporation in the U.S. and/or other countries. Other company and product names may be trademarks of the respective companies with which they are associated. Features, pricing, availability and specifications are subject to change without notice.

A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/38343cb8-8bc8-42b0-aa76-e3d280ae5507

business finance assignment pdf

NVIDIA Corporate Offices

business finance assignment pdf

NVIDIA's Silicon Valley campus in Santa Clara, Calif.

Quick links.

  • Email Alerts
  • Request Printed Materials
  • Download Library

To receive notifications via email, enter your email address and select at least one subscription below. After submitting your information, you will receive an email. You must click the link in the email to activate your subscription. You can sign up for additional subscriptions at any time.

Email Alert Sign Up Confirmation

Investor contact.

2788 San Tomas Expressway Santa Clara, CA 95051

  • Contact Investor Relations

Investor Resources

  • Request Information
  • Stock Quote & Chart
  • Historical Price Lookup
  • Investment Calculator
  • Fundamentals
  • Analyst Coverage
  • Management Team
  • Board of Directors
  • Governance Documents
  • Committee Composition
  • Contact the Board
  • Corporate Social Responsibility
  • Events & Presentations

Financial Info

  • Financial Reports
  • SEC Filings
  • Quarterly Results
  • Annual Reports and Proxies

Investors and others should note that we announce material financial information to our investors using our investor relations website, press releases, SEC filings and public conference calls and webcasts. We intend to use our  @NVIDIA  Twitter account,  NVIDIA Facebook  page,  NVIDIA LinkedIn  page and company  blog  as a means of disclosing information about our company, our services and other matters and for complying with our disclosure obligations under Regulation FD. The information we post through these social media channels may be deemed material. Accordingly, investors should monitor these accounts and the blog, in addition to following our press releases, SEC filings and public conference calls and webcasts. This list may be updated from time to time.

business finance assignment pdf

  • Privacy Policy
  • Share full article

Advertisement

Supported by

Reddit Files to Go Public, in First Social Media I.P.O. in Years

The message board site, founded in 2005, detailed its financial performance in a filing. It is the last of an early generation of social media companies to aim for a public offering.

A hallway with the word “reddit” and the company’s symbol taking up a large wall.

By Mike Isaac

Mike Isaac has covered Reddit and social media companies since 2010 from San Francisco.

Reddit, the community-focused message board site, filed to go public on Thursday, paving the way for it to be the first major social media company to debut on the stock market in years and a test for private companies after a drought in initial public offerings.

In an offering prospectus , Reddit disclosed its financial performance in preparation for selling shares to investors. The San Francisco-based company reported that its revenue rose more than 20 percent as its losses narrowed last year. It added that it had 73 million daily users and more than 100,000 active communities.

The prospectus kicks off a process to the stock market, with the 18-year-old company set to meet potential investors to whet their appetites for buying its shares. Reddit could go public on the New York Stock Exchange in a matter of weeks under the stock symbol RDDT.

Reddit’s bankers are seeking a valuation of at least $5 billion in its I.P.O., according to two people familiar with the matter. That is roughly half of the $10 billion valuation the company fetched in a 2021 private financing round. The talks are continuing, and the price could still rise or fall in the weeks ahead.

Reddit is the last of an earlier generation of social media companies to aim for the stock market, after Facebook’s high-profile offering in 2012 , Twitter’s in 2013 and Snap’s in 2017 . In the years since, the social media industry has changed, facing scrutiny for misinformation, hate speech and other effects. Some of the companies have shifted directions; Facebook was renamed Meta, and Twitter was bought by Elon Musk , who took the company private in 2022 and renamed it X.

Reddit’s move is also highly anticipated after a lull in initial public offerings. Just 108 companies went public in the United States last year, roughly a quarter of the number that debuted in 2021, according to data compiled by Renaissance Capital. Some of the biggest tech offerings last year were Arm, a chip designer , and Instacart , a grocery delivery company.

“We are going public to advance our mission and become a stronger company,” Steve Huffman, Reddit’s chief executive, said in a founder’s letter included in the prospectus. “We hope going public will provide meaningful benefits to our community as well. Our users have a deep sense of ownership over the communities they create on Reddit.”

Mr. Huffman added that the company wanted “this sense of ownership to be reflected in real ownership — for our users to be our owners” and that “becoming a public company makes this possible.” Reddit said it would reserve a chunk of its shares at the I.P.O. price for 75,000 of the company’s most prolific users if they wished to purchase them.

In its prospectus, Reddit said revenue in 2023 was $804 million, up about 21 percent from $666 million a year earlier. The company lost $90 million in 2023, compared with a $158 million loss the year before, according to the prospectus.

Some of its largest shareholders include Advance Magazine Publishers, Tencent Cloud Europe, Vy Capital, Fidelity Management, and Sam Altman, a former Reddit board member and the chief executive of OpenAI.

Reddit’s path to the public markets has been long and rocky. Founded in a University of Virginia dorm room in 2005 by Mr. Huffman and Alexis Ohanian, the site began as a destination for anonymous users to come together and discuss anything from popular TV shows, to guitars, makeup and power washers.

The site was unique in that it largely focused on tightknit communities, mostly anonymous, all moderated by volunteers who self-governed their forums, or “subreddits,” based on rules of their own making. It became known for “A.M.A.s,” otherwise known as the “ask me anything” sessions, sometimes with public figures like former President Barack Obama, Microsoft’s Bill Gates and the actor Nicolas Cage.

The company raised hundreds of millions of dollars in funding over the years, including $250 million and more than $410 million in two financing rounds in 2021. Investors include Fidelity Investments, Andreessen Horowitz, Sequoia Capital and Tencent Holdings.

Like other early social networking efforts, Reddit initially eschewed offering advertising and making money. It instead focused on forms of revenue that came from community ideas, like a user-generated e-commerce system and awards that users could buy one another. Those ideas are still in play.

Reddit eventually embraced advertising based on its topic-focused communities. Brands like Laneige, for instance, targeted ads to a forum called Makeup Addiction, one of the most active subreddits, in which users discuss cosmetics and how to apply them.

The site has also built an emerging data licensing business based on its enormous corpus of conversation data, which has become increasingly important amid a frenzy over artificial intelligence. A.I. models are trained on gobs of such data so that they can become more powerful. On Thursday, Reddit announced a licensing deal with Google, which has used Reddit data to train and build its A.I. systems.

“We expect our data advantage and intellectual property to continue to be a key element in the training of” future A.I. models, Mr. Huffman said in the letter. The company has a number of undisclosed licensing agreements to use its data and expects to make upward of $203 million over the next three years from those contracts, according to the filing.

The site has had its share of struggles. It faced controversy after controversy over its refusal to moderate communities in its early years, including its role in spreading misinformation during the Boston Marathon bombing in 2013 , and hosting racist and misogynistic content in some of its smaller subreddits. Last year, Reddit faced a user revolt after changing some of its rules and restricting third-party developers from using the site’s content without paying for it.

Reddit has reversed its position on moderation and has updated and more strictly enforced its policies in recent years, making it more attractive for marketers to place advertising across the site.

The company also had a revolving door of leaders in its first decade, being helmed by four chief executives before Mr. Huffman returned to lead the site in 2015 .

Reddit cautioned potential investors that it faced challenges and potential risks as a public company, including the rise of large language models, the underlying A.I. systems that could potentially aggregate and synthesize the site’s content and let users view Reddit without visiting the site or seeing advertising.

The company may also face difficulty courting brands in a digital ad market dominated by Meta and Google.

“Reddit may face a daunting challenge in growing its advertising business, given the gap between its platform’s capabilities and those that are best in class,” said Eric Seufert, an independent mobile analyst who closely monitors social media companies and advertising.

The company also warned that it was heavily dependent on its community for moderating the platform, and that future revolts or departures could harm the site.

“We have many opportunities and much to do,” Mr. Huffman said.

Lauren Hirsch contributed reporting from New York.

Mike Isaac is a technology correspondent for The Times based in San Francisco. He regularly covers Facebook and Silicon Valley. More about Mike Isaac

IMAGES

  1. ASM 2- Business Finance-Nguyen Thi Nhat Anh s3757073-2

    business finance assignment pdf

  2. Financial Management Assignment

    business finance assignment pdf

  3. Financial Management Assignment Sample

    business finance assignment pdf

  4. Financial Management Assignment Sample PDF

    business finance assignment pdf

  5. Business Finance Assignment 5.pdf

    business finance assignment pdf

  6. PDF Financial Management

    business finance assignment pdf

VIDEO

  1. Sources of business finance

  2. 12 Business Studies || Chapter Financial Management || CBSE

  3. GROUP ASSIGNMENT SMP10703

  4. Finance Assignment

  5. ACC501 Business Finance Quiz 3 Fall 2023 Virtual University of Pakistan

  6. corporate finance assignment risk and return calculation

COMMENTS

  1. PDF Chapter 1 -- An Introduction To Financial Management

    (1) Firm's Operation (4a) (Real Assets) Financial Managers (3) (4b) Capital Markets (Financial Assets) Cash raised by selling financial assets in financial markets Cash invested in firm's operations and used to purchase real assets Cash generated from firm's operations (4a) Cash reinvested in firms' operations (4b) Cash returned to investors

  2. (PDF) Business Finance

    This assignment on business finance. PART 1 1 1. Defining meaning of: 1 a. Profit and Cash flow along with their differences. Ask a question from expert. Ask now. Study. Writing. Homework Help. Blog; Subscription Sign In (PDF) Business Finance - Assignment. 12 Pages 3497 Words 418 Views Added on 2020-10-22 (PDF) Business Finance - Assignment

  3. Chapter 1 -Introduction to Financial Management

    After completing this chapter, students should be able to. Define what is meant by finance and describe some of its primary areas. Define and compare/contrast sole proprietorships, partnerships, and corporations. Identify key advantages/disadvantages of the corporate form of ownership. Define and identify key characteristics of stocks and bonds.

  4. PDF FINANCE 611: CORPORATE FINANCE

    Textbook The textbook for the course is: Corporate Finance (plus MyFinanceLab), Jonathan Berk and Peter DeMarzo, 3rd ed., Pearson - Prentice Hall, 2014. (SBN-10: -13-342415-4; ISBN-13: 978-0-13- 342415-7) There are several options for accessing the book and MyFinanceLab. You can purchase the book with MyFinanceLab.

  5. PDF The Business Finance Guide

    4 The business finance guide Step out from your business Entrepreneurs want to focus on doing business. For many, finance falls under the category of administration, which may not be their forte. But to make sure the business can move forward entrepreneurs must step out from the business and ask the questions that need answering.

  6. PDF Corporate Finance-Fin310

    Kindly do the analysis and interpretation of the following content and submit the assignment in 6th week.(Using Bloomberg) Content of the assignment report: 1. Introduction of the Company (Brief profile: Business of the Company, financial objectives, size, growth rate , contribution towards GDP of economy with graphs, and sales projections) 2.

  7. Business Finance Assignment

    Business Finance Assignment - Free download as PDF File (.pdf), Text File (.txt) or read online for free.

  8. PDF Basic Concepts and Principles of Business Finance

    06. Careers In Finance. The Reasons for Studying Business Finance. There are several reasons for studying finance. Knowledge of the basics of finance help a person in making informed economic decisions, personal and business investment decisions, and career decisions. To make informed economic decisions: Since elected officials have the power ...

  9. assignment1.pdf

    Business Analysis Using Financial Statements. Menu. More Info Syllabus Calendar Lecture Notes ... Description: Valuation example: DELL Computer. Resource Type: Assignments. pdf. 521 kB assignment1.pdf Download File DOWNLOAD. Course Info Instructor ... assignment Problem Sets. grading Exams with Solutions. Download Course.

  10. Small Business Finance Assignment Sample

    SMALL BUSINESS FINANCE ASSIGNMENT SAMPLE - Free download as PDF File (.pdf), Text File (.txt) or read online for free. FM202

  11. Business Finance Assignment

    Business Finance Assignment - Free download as PDF File (.pdf), Text File (.txt) or read online for free. Business Finance Assignment

  12. (PDF) SOURCES OF BUSINESS FINANCE

    PDF | The chapter discusses the various financing options available to businesses based on their financing needs and capacities. | Find, read and cite all the research you need on ResearchGate

  13. BAFI1012

    3/4/2019 82% (11) 1BUSINESS FINANCE INDIVIDUAL ASSIGNMENT Semester 1 2019 (40 marks worth 40%) Due Date: Week 12 In this assignment you will pull together your understanding of the main concepts in Business Finance and analyse financial statements to make some 'real' business decisions.

  14. BUSINESS FINANCE ASSIGNMENT VERSION 1 3 .pdf

    1 BUSINESS FINANCE GROUP ASSIGNMENT VERSION 1 Semester 1 2020 (40 marks worth 40%) Due Date: Week 12 In this assignment you will pull together your understanding of the main concepts in Business Finance and analyse financial statements to make some 'real' business decisions. Some of the figures used in the following scenario are real, some are not.

  15. 25+ Financial Books for Free! [PDF]

    Finance is a branch of economics that deals with the study of money management. The control of expenses, income, investments and savings is the responsibility of this discipline. In this sense, having knowledge of this subject helps to make intelligent decisions about financial resources. This area of economics has developed resources and tools ...

  16. Assignment on Business Finance pdf

    This Assignment on Business Finance pdf. (i): Purpose of Budget Preparation 3 (ii): Cost Drivers of the TownScape and application of traditional budgeting

  17. Financial Management Assignment Sample PDF

    This assignment on financial management. Financial management lecture power point by: mekonnen kumlachew MSc. Ask a question from expert. Ask now. Study. Writing. Homework Help. ... Sources of Business Finance PDF... | 9 | 1382 | 115. View document. Concept and Importance of Financial Management in Applied Business Finance... | 10 | 2493

  18. Unit 3

    BTEC Assignment Brief Qualification Pearson BTEC International Level 3 Extended Diploma in Business Unit Number and Title Unit 3 - Business Finance Learning Aims A: Explore types of business finance available at different stages in the growth of a business. B: Understand how financial planning tools can be used to analyze financial data and assess business risks.

  19. Managing Business Finance Assignment

    Managing Business Finance Assignment | PDF | Ericsson | Equity (Finance) Managing Business Finance Assignment - Free download as Word Doc (.doc), PDF File (.pdf), Text File (.txt) or read online for free.

  20. Assignment 3-Jorge Mendoza5 (pdf)

    Finance document from Saint Leo University, 1 page, 1/29/24, 2:18 PM Assignment 3-Jorge Mendoza Student: Jorge Mendoza Date: 1/29/24 Instructor: Ronald Premuroso Assignment: Assignment 3 Course: Finance for Managers FIN-325-OL02 Bond valuation—Semiannual interest Calculate the value of each of the bonds sh

  21. Business Finance MCQ [Free PDF]

    Get Business Finance Multiple Choice Questions (MCQ Quiz) with answers and detailed solutions. Download these Free Business Finance MCQ Quiz Pdf and prepare for your upcoming exams Like Banking, SSC, Railway, UPSC, State PSC.

  22. PDF Strategies for Essay Writing

    assignment. Unless the instructor has specified otherwise, most of your paper assignments at Harvard will ask you to make an argument. So even when the assignment instructions tell you to "discuss" or "consider," your instructor generally expects you to offer an arguable claim in the paper. For example, if you are asked to

  23. FNCE 627 Rupinder Individual Assignment 2204123.pdf

    3 1.0 Assumptions and Key Considerations 1.1 Business Sale Assumptions The present growth trajectory serves as the foundation for the business sale assumptions for the technology-based company owned by the Hill family. According to estimates, the company might fetch a high price when it is sold, between $11 and $13 million USD, if this trajectory continues (McAdam et al. 2020).

  24. PDF BASF's financial strength supports proposed stable dividend of €3.40

    continued financial strength, even in challenging times," said Elvermann. Proposed dividend of €3.40 per share . A dividend of €3.40 per share, equal to the prior-year level, will be proposed to the ... business in those regions of the world that are growing more dynamically and offer attractive conditions for investments."

  25. BUSINESS-FINANCE-ASSIGNMENT.pdf

    View BUSINESS-FINANCE-ASSIGNMENT.pdf from DIPLOMA OF IT BSBSWOR502 at Aibt International Institute of Americas-Val. BUSINESS FINANCE ASSIGNMENT 1 Table of Contents Introduction: . 3 Literature

  26. PDF Oregon Department of Consumer and Business Services Division of

    350 Winter St. NE, Rm 410, PO Box 14480, Salem, OR 97309 503-947-7694 dfr.oregon.gov Level 3 - 1Restricted . Oregon Department of Consumer and Business Services

  27. NVIDIA Announces Financial Results for Fourth Quarter and Fiscal 2024

    Record quarterly revenue of $22.1 billion, up 22% from Q3, up 265% from year ago Record quarterly Data Center revenue of $18.4 billion, up 27% from Q3, up 409% from year ago Record full-year revenue of $60.9 billion, up 126% SANTA CLARA, Calif., Feb. 21, 2024 (GLOBE NEWSWIRE) - NVIDIA (NASDAQ: NVDA) today reported revenue for the fourth quarter ended January 28, 2024, of $22.1 billion, up 22% ...

  28. Assignment 1 Business & Finance

    Assignment 1 Business & Finance - Free download as Word Doc (.doc / .docx), PDF File (.pdf), Text File (.txt) or read online for free. Assignment 1 Business & Finance

  29. Reddit Files to Go Public, in First Social Media I.P.O. in Years

    The message board site, founded in 2005, detailed its financial performance in a filing. It is the last of an early generation of social media companies to aim for a public offering.