《财务管理和中小型企业的盈利能力外文翻译》由会员分享，可在线阅读，更多相关《财务管理和中小型企业的盈利能力外文翻译（9页珍藏版）》请在金锄头文库上搜索。
1、0外文翻译原文Financial management and profitability of small and medium enterprisesMaterial Source: Southern Cross University Author: Kieu Minh Nguyen1. Objectives of financial management Like many other management sciences, financial management, firstly, establishes its goal and objectives. Objectives of
2、 financial management are foundations or bases for comparing and evaluating the efficiency and effectiveness of financial management. The final goal of financial management is to maximize the financial wealth of the business owner (McMahon, 1995). This general goal can be viewed in terms of two much
3、 more specific objectives: profitability and liquidity. * Profitability management is concerned with maintaining or increasing a businesss earnings through attention to cost control, pricing policy, sales volume, stock management, and capital expenditures. This objective is also consistent with the
4、goal of most businesses. * Liquidity management, on one hand, ensures that the businesss obligations (wages, bills, loan repayments, tax payments, etc.) are paid. The owner wants to avoid any damage at all to a businesss credit rating, due to a temporary inability to meet obligation by: anticipating
5、 cash shortages, maintaining the confidence of creditors, bank managers, pre-arranging finance to cover cash shortages. On the other hand, liquidity management minimizes idle cash balances, which could be profitable if they are invested (McMahon, 1995). While discussing the objective function of a p
6、rivately held small firm, Ang (1992) indicated that its objective function is to maximize three components. The first is to maximize its current market price, to avoid unwanted mergers and to obtain outside financing in the securities market. The second is to maximize long term or intrinsic value, i
7、f the two values diverge. The last is to maximize non-owner managers own pecuniary and non-pecuniary incomes by avoiding control rights. 1Whether the absence of marketable securities means that small firms need not be concerned with current performance and can concentrate on long-term values, depend
8、s on the organizational types and circumstances. Profitable firms, where outside funding is not a major concern, can afford to maximize long-term value whereas for those small businesses, which need outside financing, current performance may be very important. Thus, a number of small businesses woul
9、d have a weighted average objective function consisting of both current profit and long-term value. Weight for current profit is expected to be higher for small businesses approaching loan re-negotiation, initial public offering, potential sale to an acquirer, signing long-term contracts with suppli
10、er or customers and possible dissolution of a partnership. On the other hand, its weight will be smaller when the business is due to pay estate taxes, renegotiate employee contracts, discourage a non-managing family member from their shares, and avoid tax on excess accumulation. In making decisions
11、related to financial management, the owner-manager or the financial manager should remember objectives of financial management and balance between liquidity and profitability objectives, and between current and long-term (growth) objectives. 2.Major decisions of financial management Generally, previ
12、ous authors had no differences in opinions of major decisions in financial management. Ross, Westerfield and Jaffe (1999, p.1) indicated three kinds of decisions the financial manager of a firm must make in business: (1) the budgeting decision, (2) the financing decision, and (3) decisions involving
13、 short-term finance and concerned with the net working capital. Similarly, Ang (1992) also indicated three main financial decisions including the investment decisions, financing decisions and dividend decisions. McMahon (1995) suggested another way of identifying the major decisions of financial man
14、agement is to look at the balance sheet of a business. There are many decisions regarding items on the balance sheet. However, they are classified into three main types: investment decisions, financing decisions and profit distribution decisions (McMahon, 1995). * Investment decisions: (1) relate to
15、 the amount and composition of a businesss investment in short-term assets (cash, stock, debtors, etc.) and fixed assets (equipment, premises, facilities, etc.), and (2) relate to the achievement of an appropriate balance between the two classes of assets. * Financing decisions: (1) relate to the ty
16、pes of finance used to acquire assets, 2and (2) relate to the achievement of an appropriate balance between short-term and long-term sources, and between debt and equity sources. * Profit distribution decisions: (1) relate to the proportion of profit earned that should be retained in a business to finance development and growth, (2) and the proportion, which may be distributed to the owner (McMahon, 1995). 3.The specific areas of financial management Most authors and researc
