What to do 1. Make your 1st and 2nd slide an outline of your presentation 2. show one point at a time 3. Simplify and limit the number of words on each slide: list the key points necessary to your presented topic 4. Write the main explanation for the new concepts

What to do 5. Show the main calculating steps for an computing example 6. Make the words large enough: at least 18-ponit font: **Use different size font for main points and secondary points 7. Use good quality images if necessary

what not to do Avoid squeezing the whole long paragraph in one slide Avoid useless words in your slides Avoid all capital letters

Sample PPT

Chapter 1: finance and financial manager Chun Yu International School Jiangxi University of Finance and Economics

Outline What is a corporation? The role of a financial manager Who is the financial manager? Principal-agent problem

What is a corporation Almost all large and medium-sized business are organized as corporations. Closely held: when a corporation is first established, its shares may all be held by a small group of investors, perhaps the company’s managers and a few backers. Public companies: when the firm grows and new shares are issued to raise additional capital, its shares will be widely traded. Most well-known corporations in the United States are public companies.

What is a corporation Corporations have three important features: 1. separation of ownership and management. The stockholders own the corporation, they do not manage it. Instead, they vote to elect a board of directors. The board of directors appoints top management and is supposed to ensure that managers act in the shareholders’ best interests. 2. corporations provide limited liability, which means that the stockholders who own the corporation cannot be held responsible for the firm’s debts. 3. A corporation is owned by its stockholders, it is legally distinct from them. As a legal “person,” it can borrow or lend money, and it can sue or be sued. It pays its own taxes (but it cannot vote!).

Company assets In general, there are two kinds of assets: 1. Real asset Many of these assets are tangible, such as machinery, factories, and offices; others are intangible, such as technical expertise, trademarks, and patents 2. Financial asset or security Financial assets include not only bank loans but also shares of stock, bonds, and a dizzying variety of specialized securities

The role of the financial manager The financial manager stands between the firm’s operations and the financial (or capital) markets, where investors hold the financial assets issued by the firm. The financial manager’s role is illustrated in Figure 1.1

The role of the financial manager The financial managers have to answer two basic questions: First, what real assets should the firm invest in? Answer: the firm’s investment, or capital budgeting decision. In other words, the firm has to decide what real assets to buy. Second, how should the cash for the investment be raised? The answer to the second is the firm’s financing decision. In other words, the firm has to decide how to raise the necessary cash.

Who is the financial manager In small companies there is often only one financial executive, the treasurer. However, most companies have both a treasurer and a controller. The treasurer’s job is to obtain and manage the company’s financing. The controller’s job is to confirm that the money is used correctly. In large firms there is also a chief financial officer or CFO, who oversees both the treasurer’s and the controller’s work.

Who is the financial manager

Principal–agent problem The separation of ownership and management has clear advantages. It also brings problems if the managers’ and owners’ objectives differ. Shareholders want managers to increase the value of the company’s stock. Managers may have different objectives. This potential conflict of interest is termed a principal–agent problem (The shareholders are the principals; the managers are their agents).

Principal–agent problem Agency costs are incurred when (1) managers do not attempt to maximize firm value (2) shareholders incur costs to monitor the managers and influence their actions.

Simple interest rate Example: Suppose you invest 100 at 6% interest for two years. You earn interest only on the original 100 each year. What is the amount in your account at the end of year 2? Solution: year 1: 100 + 0.06(100) = 100(1.06) = 106 year 2: 106 + 0.06(100) = 100*[1+2(0.06)] = 112

Questions?