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MindMap Gallery Basic principles of CPA financial cost management

Basic principles of CPA financial cost management

The basic principles of CPA financial cost management include corporate organizational form and management content, financial goals and stakeholder requirements, core concepts and basic theories of financial management, financial tools and financial markets, etc.

Edited at 2021-02-23 22:49:59

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Basic principles of CPA financial cost management

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Outline

Basic principles of CPA financial cost management

1. Enterprise organizational form and financial management content

1. Enterprise organizational form

Personal owned enterprises

partnership

General partnership: unlimited, joint and several liability

Limited partnership: unlimited limited

Special general partnership: ① Intentional or grossly negligent person: Wireless Co., Ltd. ②Unintentional or gross negligence, all partners: unlimited joint and several liability. (Responsibility falls on the person)

corporate enterprise

advantage

Infinite existence

Limited Liability

Equity can be transferred

Restrictions

double taxation

High component costs

There is an agency problem

2. Main contents of financial management

Long-term investment

Investment entity: company

Investment objects: long-term operating assets

Investment method: direct investment

Investment purpose: Obtain physical resources

long term financing

Financing entity: company (a company is a legal person that is legally independent from shareholders)

Financing methods: ① Direct financing ② Indirect financing through financial institutions

Financing object: long-term capital. Refers to the capital that a company can use in the long term, including equity capital and long-term debt capital.

Financing decision topic: capital structure decision and dividend distribution decision (capital structure decision is the most important financing decision)

working capital management

Short term investment and financing

2. Objectives of financial management and requirements of stakeholders

1. Objectives of financial management

profit maximization goal

Earnings per share maximization goal

Shareholder wealth maximization goal

Market added value of shareholders’ equity = Market value of shareholders’ equity – Shareholders’ investment capital

If shareholder investment capital remains unchanged, stock price maximization = shareholder wealth maximization; if debt value and shareholder investment capital remain unchanged, corporate value maximization = shareholder wealth maximization

2. Stakeholder requirements

Operators’ interest requirements and coordination

Strive to find the minimum sum of monitoring costs, incentive costs and losses that deviate from shareholder goals.

Creditors’ interest requirements and coordination

Include restrictive clauses in loan contracts

Interest requirements and coordination of other stakeholders

Broad stakeholders

Includes everyone who has an interest in business decisions

Stakeholders in the narrow sense

Relevant contacts other than shareholders, creditors and operators

3. Core concepts and basic theories of financial management

1. Core concepts

time value of money

Risk and reward

2. Basic theory

Cash flow theory (the most basic), risk assessment theory, value assessment theory

capital structure theory, portfolio theory

4. Financial instruments and financial markets

1. Types of financial instruments

feature

deadline

fluidity

risk

Profitability

type

Fixed income securities

equity securities

Derivative securities

2. Types of financial markets

Depending on whether the transaction period exceeds one year

currency market

Short-term treasury bonds, negotiable certificates of deposit, commercial papers, bank acceptance bills

capital market

Stocks, corporate bonds, long-term government bonds and long-term bank loans

According to different markets of securities

Bond Market

equity market

Depending on whether the securities being traded are issued for the first time

primary market

Secondary market

follow transaction procedures

floor trading market

For example, Shanghai Stock Exchange, Shenzhen Stock Exchange

OTC market

For example, the New OTC Market

3. Capital market efficiency

What does capital market efficiency mean?

Prices can reflect all available information synchronously (quickly) and completely (completely)

Basic conditions for effective capital markets

rational investor

independent rational bias

arbitrage

Classification of capital markets

inefficient market

weak efficient market

history information

Testing methods: ① Random walk (future stock price changes have nothing to do with historical stock prices); ② Filtering test (filtering principle is useless)

semi-strong form efficient market

Historical information Public information

Testing methods: ① Event study (the stock price is only related to the events disclosed on the day); ② Investment fund performance study (the performance of the investment fund cannot continue to exceed the overall market rate of return)

strong form efficient market

Historical information Public information Internal information

Test method: Insider trading (the rate of return of insider trading cannot continue to exceed the rate of return of the market as a whole)