Financial Management
Financial management (재무관리) is the field of study that examines what rational decisions a chief executive officer (CEO) and financial managers should make to maximize shareholder's wealth. Its central questions are:
- Capital budgeting: Where should the firm invest?
- Capital structure: Where should the firm obtain the funds to invest?
- Working capital: How should the firm handle its day-to-day financial operations?
From classical economics' point of view, a firm's objective is to maximize shareholders' wealth. Recently, however, some argue that the firm should consider the value created for a broader set of stakeholders, not just shareholders.
Financial Management as a Course
At most universities, Financial Management is an introductory first- or second-year undergraduate course that provides the foundational concepts for later, more specialized financial studies. Key topics include financial statements, cash flows, the time value of money, risk, and portfolios. A widely used textbook is Ross, Westerfield, Jordan, Fundamentals of Corporate Finance (13th edition, 2021, McGraw-Hill Education, ISBN: 9781265553609). Instructors typically cover Parts 1-5 of that text in Financial Management; Part 6 and beyond are usually taken up in a follow-on Corporate Finance course. The outline below follows RWJ's organization and highlights the main concepts.