Finance For Non-Financial Managers 7th Canadian Edition By Pierre Bergeron Test Bank

Copyright 2014 by Nelson Education Ltd. Chapter 1 Overview of Financial Management REVIEW QUESTIONS 1. Explain the key difference between what financial management focused on in the past versus today. In the past, financial management focused primarily on external activities (e.g., raising money, acquisitions, legal matters), that is, one segment of the statement of financial position. Today, although the management of raising money from investors is still important, financial management has focused increasingly on the other segment of the statement of financial position, finding ways to manage more efficiently and effectively all assets of a business, that is, non-current assets and current assets. 2. What factors of the external environment have an impact on a companys financial statements? All external factors have an impact on a companys financial statements. They include economic activities, political activities, world economies, technological changes, industry activities, and efficiencies related to manufacturing activities. 3. Define financial management. Financial management means ensuring that a company uses its resources in the most efficient and effective way to maximize profitability, which ultimately increases the value of the business. 4. Why is it important for managers to ask questions such as How are we doing? and How will our business