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The finacial manager. Financial management is about creation of plans for the future of organization. Its aim is to create a positive cash flow. The administration and maintenance of financial assets are included, as well as careful supervision and creative ideas for the future operations. Also, financial management is responbible for managing risks. A modern financial manager has to create positive cash flow, administrate and maintain the financial assets. He also should do careful supervision on the future operations, he shall be able to predict and to always have creative ideas for the future operations. Nowadays, financial manager must manage risks and identify them.
Financial management nowadays plays the main role when searching for data and finding a way out to the direct control of the finances. A financial manager analises available data to decide which steps should the enterprise take. Financial management is important, because each organization needs to control its finances, a small company or a corporation.
Present Values. Present value is a current value of future amount expected to be received or paid out. It is usually discounted to appropriate rate, and at the cost of capital rate. Present value helps to compare investment alternatives. It is usually called present worth, meaning the present value.
Objectives of the firm corporate governace.
Corporate governance is the set of rules and practices. Corporate governance include processes, customs, policies, laws, which define the way a corporation is directed, administered or controlled. According to these rules, a board of directors has to provide accountability, fairness, and transparency in the firm’s relationship with its stakeholders.
An important aspect of corporate governance – to provide the accountability of organization via mechanisms. The aim of these mechanisms is to try to reduce or eliminate the principal problem. Separate thread of discussions focuses on the impact of a corporate governance system ineconomic efficiency, with a strong emphasis on shareholders’ welfare. Corporate governance helps a corporation to find its way and to receive better administration an control over the situation.
Corporate governance represents the structure and the relationships that determine corporate direction. The board of directors is central to corporate governance and its framework depends on the environment of the modern community. This century is predicted to be focused on governance. This century is the century of progress, and that is why each corporation needs professionals, clever governance and has to be creative to achieve success.

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Risks and returns. Nowadays, the risk and return is the type of relationship between the return gained on an investment and, as a fact, also the risk undertaken in investments, according to the situation.
A lot of critics of Social Security want defined-benefit plan to be replaced fully or partially. Individual account plans differ very much from traditional Social Security. The worker’s ultimate retirement benefit only depends on the size of his contributions and also in success of his own investment plan. Although the risk is inevitable in everything people do, it can be foreseen, predicted, and calculated an approximate percentage. A good manager of projects will permanently work on the risks and take action at a time.
Anyway, the cost of capital is the cost of a company’s funds. Risks and returns are used to evaluate new projects of a company. It is always important to carefully calculate possible risks, to find out necessary connections in the specific situations and to foreseen some things that can help in the future to avoid unexpected situations.


Cost of capital. The cost of capital is the cost of a company’s funds. As well, the cost of capital can be defined as a cost that is associated with different types of capital. Every component has a cost, that, as we will see, is based on the rate of return required by the investors. These investors usually provide funds to the firm. Cost of debt for example, is simple to calculate.
Capital structure is a mix of the types of capital to finance assets of a company. For example, one firm’s capital structure might consist of 40 percent debt and 60 percent common equity while another firm’s capital structure might be 60 percent debt, 10 percent preferred equity, and 30 percent common equity.
If to describe optimal capital structure—the mix of capital—that is, debt and equity—that minimizes the firm’s WACC, thus maximizes its value. At this point, we assume that the firm’s capital structure is optimal.
The cost of equity is usually more challenging to calculate and it in generally defined as the risk-weighted projected return required by investors.
Capital budgeting. Capital budgeting deals with the valuation of real assets. Capital budgeting, as a rule, determines planning process. Capital budgeting generally deals with the valuation of real assets. Capital budgeting is defined as the process of determining which potential long-term projects are worth undertaking, by comparing their expected discountedcash flows with their internal rates of return. Almost all formal methods are used in capital budgeting. They include techniques – for example – accounting rate of return.
Capital budgeting is the independent part of the free budget. There are reflected incomes and outcomes of the funds of the investment activity of the enterprise.
The investment budget may include those activities that provide a strategic development plan; projects that must be implemented at the request of government authorities; projects related to the implementation of current budgets; projects that are aimed at coping with emergencies.
All activities can be divided into continuing and newly launched projects begin. Investment budget also includes portfolio investment, if provided for company’s development strategy in the forthcoming budget period. In drawing up the investment budget carefully analyzed in the company’s capabilities, which are aimed at financing investment projects, with a mandatory separation of sources of funding. In the investment budget are nincluded only those projects that can be funded. If financial resources are limited, we have to choose, and preference is given to: projects aimed at meeting the requirements of public authorities;projects, non-implementation of which could cause a shutdown of the enterprise; ongoing projects.
Risks. Risk is the variability of possible outcomes, which finally describes positive or negative results. In general there are usually made plenty of calculations and operations to calculate the approximate risk that an organization can undergo. That is why the risk is one of the main factors in the company’s functioning and planning. The risk can be identifies, although there should not be speculatiod about it too much, because the most important is to be able to foresee the situation and to have information. Having the up-to-date information is one of the main factors of prosperity of the organization, as now who have the newest information and who is aware of the most needed products or services- wins. Everything runs fast these days and everything should be done on time. The focus must be made on the progress as well as all the efforts for the success, because the risk is always present.
Risk can occur in the workplace, incidental and inherent risks also exist, they have much in common with the financial risk. Financial risk is the probability of an investment’s actual return to be different than expected- for example a possibility of losing a part or all of the original investment. Financial risk can be market-dependent, including different market factors.
In finance, risk consists of different methods, because there is no exact definition to it. Financial markets are considered to be a proving ground for general methods of risk assessment. There are plenty of methods of calculation of the risk, mathematical, social anf innovative, but the outcome is the one and simple. There is always something left that one person did not include into calculation, to be exact, and to calculate the risk properly.
A risk possibility is always an analyses base, that helps to identiry it and to change something for good, or even to prevent something. Although there is no such a thing that will have even less than 1 percent of risk.
In financial markets it can be needed sometimes to to measure credit risk and also to calculate the investors regret, etc. The basic idea in finance is the relationship between risk and return. The greater the return might be, the greater the risk will be. Although it depends on many factors, but the fact is, that the more responsibility is, the more risk. Those who risk will win one day, it is just the matter what is on in the game everyone is playing. The risk exists everywhere; people should not forget about it under any circumstances, it is just a matter of choice.

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