Unit 20 Financial Management.doc

Unit 20 Financial Managementthe Brief History of Financial Management Field Introduction Financial managers have the primary responsibility for acquiring funds (cash) needed by a firm and for directing these funds into projects that will maximize the value of the firm for its owners. The field of financial management is an exciting and challenging one. Any business has important financial concerns and its success or failure depends in a large part on the quality of its financial decisions. Every key decision made by a firms managers has important financial implications. Managers daily face questions like the following. The Finance Function财务职能 Introduction引论Financial managers have the primary responsibility for acquiring funds (cash) needed by a firm and for directing these funds into projects that will maximize the value of the firm for its owners. 财务经理的基本职责是获得公司所需要的资金并把资金投入到能使所有者财富最大化的项目中去。The field of financial management is an exciting and challenging one. 财务管理这一领域是很具有挑战性的。Any business has important financial concerns and its success or failure depends in a large part on the quality of its financial decisions. 公司的经营要重点考虑财务方面的问题并且其成败在很大程度上取决于其财务决策的质量。Every key decision made by a firms managers has important financial implications. Managers daily face questions like the following. 公司管理者做出的每一个关键决策都有重要的财务意义。经理们每天面对着以下这些问题： Will a particular investment be profitable? Where will the funds come from to finance the investment? Does the firm have adequate cash or access to cash-through bank borrowing agreements, for example-to meet its daily operating needs? Which customers should be offered credit, and how much should they be offered? How many inventories should be held? Is a merger or acquisition advisable? How should profits be used or distributed? That is, what is the optimal dividend policy? In trying to arrive at the best financial management decisions, how should risk and return be balanced?How many inventories should be held? Is a merger or acquisition advisable? How should profits be used or distributed? That is, what is the optimal dividend policy? In trying to arrive at the best financial management decisions, how should risk and return be balanced?Will a particular investment be profitable? 某项投资有利可图吗?Where will the funds come from to finance the investment? 投资所需的资金从哪里筹集?Does the firm have adequate cash or access to cash-through bank borrowing agreements, for example-to meet its daily operating needs? 公司有足够的现金或取得现金的渠道(如通过银行借款协议)去满足日常经营需要吗?Which customers should be offered credit, and ho w much should they be offered? 哪些顾客可以被给予信用?数额是多少? How many inventories should be held? 存货应该被保持在什么水平? Is a merger or acquisition advisable? 合并或者购并是可行的吗? How should profits be used or distributed? That is, what is the optimal dividend policy? 利润应该如何被使用或分配?也就是说最优秀的股利政策是什么? In trying to arrive at the best financial management decisions, how should risk and return be balanced? 在试图做出最佳的财务管理决策时，风险和收益的关系应该怎样平衡? A Brief History of the Financial Management Field Prior to the 1930s, the field of financial management basically was confined to descriptive discussions of the various financial markets and the securities traded in those markets. Thus, the traditional finance management mainly focus on the debt and the stockholders interest of balance sheet and on the raising of capital. Prior to the 1930s, the field of financial management basically was confined to descriptive discussions of the various financial markets and the securities traded in those markets. 财务管理领域的简单回顾在20世纪30年代以前，财务管理基本上局限于对金融市场和在这些市场上交易的证券进行描述性的讨论。Thus, the traditional finance management mainly focus on the debt and the stockholders interest of balance sheet and on the raising of capital. 因此，传统的财务管理主要研究资产负债表的负债及股东权益和资金的筹集。 The field underwent a number of significant changes during the Great Depression, when it became more involved with legal matters of bankruptcy, reorganization, and government regulation.The field underwent a number of significant changes during the Great Depression, when it became more involved with legal matters of bankruptcy, reorganization, and government regulation.在经历了大萧条之后，这一领域发生显著的变化，更多地涉及了破产的法律事务、重组和政府调控。 During the 1950s, however, a number of significant changes took place in the field. First, financial management was expanded to include the asset side of the balance sheet, or the investment of a firms funds. In addition, the application of discounted cash flow techniques to the problems of capital expenditure analysis was being refined and perfected. Also, financial researchers were making significant breakthroughs in developing techniques for measuring the cost of capital and valuing financial assets. Progress in the areas of both capitals budgeting and cost of capital has continued to the present day.During the 1950s, however, a number of significant changes took place in the field. 这个领域在20世纪50年代发生了许多重大的变化。First, financial management was expanded to include the asset side of the balance sheet, or the investment of a firms funds. 首先，财务管理包括了资产负债表中的资产方，或者说是公司资金的投资。In addition, the application of discounted cash flow techniques to the problems of capital expenditure analysis was being refined and perfected. 此外，在资本支出分析问题中应用的折现技术被更新和优化。Also, financial researchers were making significant breakthroughs in developing techniques for measuring the cost of capital and valuing financial assets. 而且，财务研究人员在测定资本成本和评估资产的技术方面取得了重大的突破。Progress in the areas of both capitals budgeting and cost of capital has continued to the present day.在资本和成本两个方面的进步一直持续到今天。 During the 1960s, mathematical models using statistical and optimization techniques were applied to the allocation of current assets, such as cash, accounts receivable and inventories, and fixed assets. Throughout the 1960s and 1970s, the trend continued toward a more quantitative and precise concept of financial management. Another important emphasis of the last two decades has been the integration of specific finance topics with a risk-adjusted model in an attempt to maximize the value of the firm and shareholder wealth.During the 1960s, mathematical models using statistical and optimization techniques were applied to the allocation of current assets, such as cash, accounts receivable and inventories, and fixed assets. 在20世纪60年代，使用统计和最优化技术的数字模型被用于流动资产和固定资产的分配。Throughout the 1960s and 1970s, the trend continued toward a more quantitative and precise concept of financial management. 流动资产包括现金、应收账款和存货等。在整个60年代和70年代，财务管理向着更为数量化和精确化的方向发展。Another important emphasis of the last two decades has been the integration of specific finance topics with a risk-adjusted model in an attempt to maximize the value of the firm and shareholder wealth. 在过去的20年里，另一个重点是把特殊的财务问题和风险调整模型结合起来以达到公司价值和股东财富最大化。 During the 1980s, there was an increasing emphasis on applying computer (and computer-related) technology to assist in financial decision making. In addition, financial managers have become more aggressive in managing the assets of the firm in response to an environment characterized by higher and more volatile interest rates.During the 1980s, there was an increasing emphasis on applying computer (and computer-related) technology to assist in financial decision making. 在20世纪80年代，逐渐开始强调应用计算机(和计算机相关的)技术辅助财务决策。In addition, financial managers have become more aggressive in managing the assets of the firm in response to an environment characterized by higher and more volatile interest rates. 此外，财务经理在管理公司资产方面变得更加有所做为。这是由于更高的和波动性更大的利率所造成的。 In the late 1980s and into the 1990s, there has been a renewed focus on the goal of shareholder wealth maximization and the creation of organizational structures that will enhance the achievement of this goal. This renewed focus on value creation and managerial efficiency is evident in the debate over corporate takeovers and leveraged buyouts. Also, the decade of the 1980s has witnessed an explosion of new financial instruments, such as options and futures contracts, which can be used to manage risk.In the late 1980s and into the 1990s, there has been a renewed focus on the goal of shareholder wealth maximization and the creation of organizational structures that will enhance the achievement of this goal. 在20世纪80年代晚期和20世纪90年代初，又开始重新强调股东财富最大化这一目标以及能够促进这一目标实现的组织结构创新。This renewed focus on value creation and managerial efficiency is evident in the debate over corporate takeovers and leveraged buyouts. 对价值创造和管理效率的强调体现了对于公司控制和杠杆收购的争论。Also, the decade of the 1980s has witnessed an explosion of new financial instruments, such as options and futures contracts, which can be used to manage risk. 而且，20世纪80年代出现了很多新的金融工具，如期权和期货合同。这些可以用来控制风险。 The Primary Goal: Maximizing Shareholder Wealth Effective financial decision making requires an understanding of the goal (s) of the firm. What objective (s)should guide business decision making? That is, what should manager try to achieve for the owners of the firm? The most widely accepted objective of the firm is to maximize the value of the firm for its owners; that is, to maximize shareholder wealth. Shareholder wealth is represented by the market price of a firms common stock.The Primary Goal: Maximizing Shareholder Wealth基本目标：股东财富最大化Effective financial decision making requires an understanding of the goal (s) of the firm. 有效的财务决策需要理解公司的目标。What objective (s)should guide business decision making? 以什么样的目标来衡量经营决策呢?That is, what should manager try to achieve for the owners of the firm? 也就是说，管理者努力使公司所有者得到什么呢?The most widely accepted objective of the firm is to maximize the value of the firm for its owners; that is, to maximize shareholder wealth. 被普遍接受的目标是使公司所有者价值最大化，也就是使股东财富最大化。 Shareholder wealth is represented by the market price of a firms common stock. 股东财富是由公司普通股的市场价值来代表的。 The shareholder wealth maximization goal states that management should seek to maximize the present value of the expected future returns to the owners (that is, shareholders) of the firm. These returns can take the form of periodic dividend payments or proceeds form the sale of the common stock. Present value is defined as the value today of some future payment or stream of payments, evaluated at an appropriate discount rate. The discount rate takes into account the returns that are available from alternative investment opportunities during a specific (future) time period. The longer it takes to receive a benefit, such as a cash dividend or price appreciation, the lower the value an investor places on that benefit. In addition, the greater the risk associated with receiving a future benefit, the lower the value an investor places on that benefit. Stock prices, the measure of shareholder wealth, reflect the magnitude, timing, and risk associated with future benefits expected to be received by stockholders.The shareholder wealth maximization goal states that management should seek to maximize the present value of the expected future returns to the owners (that is, shareholders) of the firm. 股东财富最大化的目标表明，管理者应该使得公司所有者(也就是股东)未来预期收益的现值最大化。These returns can take the form of periodic dividend payments or proceeds form the sale of the common stock. 这些收益包括定期支付的股利或出售普通股所得的收入。 Present value is defined as the value today of some future payment or stream of payments, evaluated at an appropriate discount rate. 现值是指根据一定的折现率把未来支付折合成的今天的价值。The discount rate takes into account the returns that are available from alternative investment opportunities during a specific (future) time period. 折现率考虑到了在给定的未来时期内不同投资机会产生的收益。returns that are available from alternative investment opportunities不同投资机会产生的收益。 The longer it takes to receive a benefit, such as a cash dividend or price appreciation, the lower the value an investor places on that benefit. 取得收益所需的时间越长，如现金股利或价值升值，投资者从中得到的价值就越少。In addition, the greater the risk associated with receiving a future benefit, the lower the value an investor places on that benefit. 此外，收到未来收益的风险越大，投资者从中得到的价值也就越少。Stock prices, the measure of shareholder wealth, reflect the magnitude, timing, and risk associated with future benefits expected to be received by stockholders. 股票价格作为股东财富的衡量标准，反映了股东在未来预期要取得的收益的大小、时间和风险。Magnitude: the greatness of size or importance; 巨大，重要性。The degree of size or importance; 尺寸的大小 Shareholder wealth is measured by the market value of the shareholders common stock holdings. Market value is defined as the price at which the stock trades in the marketplace, such as on .the New York Stock Exchange. Thus, total shareholder wealth equals the number of shares outstanding times the market price per share.Shareholder wealth is measured by the market value of the shareholders common stock holdings. 股东财富由股东所持的普通股的市场价值来衡量。Market value is defined as the price at which the stock trades in the marketplace, such as on .the New York Stock Exchange.市场价值是指股票在市场上的交易价格，如在纽约股票交易所。Thus, total shareholder wealth equals the number of shares outstanding times the market price per share. 因此，总的股东财富等于发行在外的股票数乘以每股的市场价格。 The objective of shareholder wealth maximization has a number of distinct advantages. First, this objective considers the timing and the risk of the benefits expected to be received from stock ownership. Similarly, managers must consider the elements of timing and risk as they make important financial decisions, In this way, managers can make decisions that will contribute to increasing shareholder wealth.The objective of shareholder wealth maximization has a number of distinct advantages. 股东财富最大化的目标有一些显著的优点。 First, this objective considers the timing and the risk of the benefits expected to be received from stock ownership. 首先，这个目标明确地考虑到了股票所有者未来预期的收益的时间性和风险性。 Similarly, managers must consider the elements of timing and risk as they make important financial decisions, 同样的，管理者在做出重要财务决策时也要考虑时间和风险的因素。In this way, managers can make decisions that will contribute to increasing shareholder wealth.管理者以这种方式做出的决策有助于增加股东财富。 Second, it is conceptually possible to determine whether a particular financial decision is consistent with this objective. If a decision made by a firm has the effect of increasing the market price of the firms stock, it is a good decision. If it appears that an action will not achieve this result, the action should not be taken. Second, it is conceptually possible to determine whether a particular financial decision is consistent with this objective. 第二，确定是否某一财务决策同目标保持一致在概念上是可能的。If a decision made by a firm has the effect of increasing the market price of the firms stock, it is a good decision. 如果公司做的决策使得公司股票的市场价格提高，那么这就是一个好的决策。 If it appears that an action will not achieve this result, the action should not be taken.如果决策达不到这样的效果，那么最好不实行这个决策。 Third, shareholder wealth maximization is an impersonal objective. Stockholders who object to a firms policies are free to sell theirs under more favorable terms (that is, at a higher price) and invest their funds elsewhere. If an investor who has a consumption pattern or risk preference that is not accommodated by the investment, financing, and dividend decisions of that firm, the investor will be able to sell his or her shares in that firm at the best price and purchase shares in a company that more closely meets the investors needs.Third, shareholder wealth maximization is an impersonal objective. 第三，股东财富最大化是一个客观的目标。 Stockholders who object to a firms policies are free to sell theirs under more favorable terms (that is, at a higher price) and invest their funds elsewhere. 反对公司政策的股东可以按照更为优惠的条件(即更高的价格)出售他们的股份并在别的地方投资。 If an investor who has a consumption pattern or risk preference that is not accommodated by the investment, financing, and dividend decisions of that firm, the investor will be able to sell his or her shares in that firm at the best price and purchase shares in a company that more closely meets the investors needs.如果一个投资者的消费模式或风险偏好与公司的投资、融资和股利决策不一致，这个投资者可以按最好的价格卖掉该公司的股票并购买与投资者需要更为一致的公司的股票。 For these reasons, the shareholder wealth maximization objective is the primary goal in ial management. Concerns for the social responsibilities of business, the existence of other objectives pursued by some managers, and problems that arise from agency relationships may cause some departures from pure wealth maximizing behavior by owners and managers. Nevertheless, the shareholder wealth maximization goal provides the standard against which actual decisions can be judged, as such, is the objective assumed in financial management analysis.For these reasons, the shareholder wealth maximization objective is the primary goal in financial management. 根据这些原因，股东财富最大化目标是财务管理的基本目标。 Concerns for the social responsibilities of business, the existence of other objectives pursued by some managers, and problems that arise from agency relationships may cause some departures from pure wealth maximizing behavior by owners and managers. 基于对商业的社会责任的考虑，一些管理者追求的其他目标以及代理关系中所产生的问题都会使所有者和管理者的行为有些偏离股东财富最大化的目标。 Nevertheless, the shareholder wealth maximization goal provides the standard against which actual decisions can be judged, as such, is the objective assumed in financial management analysis.然而，股东财富最大化的目标是判断实际决策的标准并因此成为财务管理分析的目标。Divergent Objectives The goal of shareholder wealth maximization specifies how financial decisions should be made. It has been observed that, in practice, not all management decisions are consistent with this objective. For example, Bennett Stewart has developed an index of managerial performance that measures the success of managers in achieving a goal of shareholder wealth maximization. Stewarts performance measure considers the difference between the return a firm earns on its invested capital and the cost of that capital. Th