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BUS FP3062 McAndrewVanessa Assessment1 Attempt1

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Running head: FINANCIAL MANAGEMENT 1
Financial Management
Vanessa McAndrew
Capella University

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FINANCIAL MANAGEMENT 2
Financial management
Finance is a broad term that describes the study of money and how it is managed.
Financial management is the planning, controlling and monitoring the procurement and
utilization of monetary resources within an organization. For example, creating a budget for your
business requires an understanding of financial management.
Finance is categorized into three areas: financial management, capital markets, and
investments. Capital markets are the markets where interest rates and stock prices are
determined. It also involves the financial institutions that supply funds to businesses. (Houston,
2012) For example, a security analyst hired by an investor to determine the true value of a stock
must have a deep understanding of capital markets to accomplish the task. Investments involve
the purchase of financial instruments or other assets with the expectation of gaining profitable
returns in the future. For example, buying land with the expectation that its value will appreciate
is a form of investment.
Business ownership
Sole proprietorship-this is an unincorporated business owned by a single person. It is easy
and inexpensive to form and subject to fewer government regulation and taxes. On the other
hand, it exposes the owner to unlimited personal liability. Partnership-this is a legal agreement
between two or more people to own a business together. They are also easy and inexpensive to
form.
Taxation is on an individual basis thus corporate income tax is avoided. However, all
partners are subject to unlimited personal liability (Houston, 2012). The corporation-legal
business entity that is distinct from its owners. The owners enjoy limited liability. Also unlike
the other forms of business ownership, corporations can raise huge amounts of capital by selling

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Running head: FINANCIAL MANAGEMENT Financial Management Vanessa McAndrew Capella University 1 FINANCIAL MANAGEMENT 2 Financial management Finance is a broad term that describes the study of money and how it is managed. Financial management is the planning, controlling and monitoring the procurement and utilization of monetary resources within an organization. For example, creating a budget for your business requires an understanding of financial management. Finance is categorized into three areas: financial management, capital markets, and investments. Capital markets are the markets where interest rates and stock prices are determined. It also involves the financial institutions that supply funds to businesses. (Houston, 2012) For example, a security analyst hired by an investor to determine the true value of a stock must have a deep understanding of capital markets to accomplish the task. Investments involve the purchase of financial instruments or other assets with the expectation of gaining profitable returns in the future. For example, buying land with the expectation that its value will appreciate is a form of investment. Business ownership Sole proprietorship-this is an unincorporated business owned by a single person. It is easy and inexpensive to form and subject to fewer government regulation and taxes. On the other hand, it exposes the owner to unlimited personal liability. Partnership-this is a legal agreement between two or more people to own a business tog ...
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