● The management of investment such as acquiring and selling stocks, bonds and other investment ventures related to other companies● Creating and managing the process for issuing shares
Trang 1U16: CORPORATE FINANCE
1 What is the definition of corporate finance? / How do you defy corporate finance? / Can you explain the term corporate finance?
Corporate finance is a broad term that is used to collectively identify the various financial dealings undertaken by a corporation.Generally, the term also applies to
the various methods, procedures, and configurations of the financial operationsemployed by a given company
Corporate finance refers to financial decisions of companies: how to best raise andspend the company funds Therefore, it is closely concerned with wall the financialdealings and the cash flow (inflows and outflows) of the company
Corporate finance is a branch of economic that studies the Corporate’s income and expenditure to evaluate the efficiency of activities
Corporate finance is concerned with how a corporation can raise and spend itscapital funds
the process of providing companies with money to invest in their businesses
Trang 2- Developing an operating budget that meets all the need of the company
- Work with other departments to track income generated from variousoperations and investments
- Ensure that the corporation is achieving the maximum benefit from availablefinancial resources while incurring the minimum amount of expenditure requiredattaining those benefits
+ Promote the wise use of all financial resources
+ Ensure smooth (tr n tru) ơ daily operation and future investment plans
+ Timely track income and expense arisen (phát sinh) from business dealings.
+ Maximize revenue and benefits
+ Minimize costs and expenses
4 What is the goal/ aim of corporate finance?
The general goal of corporate finance is to ensure that the corporation is
achieving (có được) the maximum benefit while incurring (phát sinh) the
minimum amount of expenditure (chi tiêu)
5 What are functions of corporate finance?
- The main function of corporate finanace is making wise use of the financial
resources available to the company
- Other functions of corporate finance include:
Trang 3● The management of investment such as acquiring and selling stocks, bonds and other investment ventures related to other companies
● Creating and managing the process for issuing shares or offering corporatebonds
● The buying of property or other companies, mergers, corporate restructures (c
ơ cấu lại), or the selling of company assets
- Functions:
+ Develop / Raise/ Mobilize a sufficient (h p lý) ợ operating budgets
+ Ensure effective use of financial resources available to the company
+ Supervise (giám sát) (in coordination with other departments) all financial
Merger (sáp nhập) is two or more companies or organizations join together
8 Who is responsible for activities of corporate finance? The finance
managers
9 What is the task (job) of the finance manager in planning the finance?
Trang 4In planning the finance, the finance manager has to take decisions on the questionlike:
- How much financial is required by the company?
- What are the source of finance?
- How to use the finance profitably?
10 What is the task (job) of the finance manager in raising the finance?
In raising the finance, the finance manager has to raise finance for the company
from many sources, such as: shares, debentures (=bonds), banks, financial institution (tổ chức tài chính), creditors,…
11 What is the task (job) of the finance manager in investing the finance?
In investing the finance, the finance manager has to achieve the objective of thecompany
12 What are 2 types of corporate finance?/ How many types of corporate capital are there?/ What is fixed capital/ working capital?/ How is the capital of a firm basically classified?
They are 2 types of corporate finance: fixed capital and working capital
+ Fixed capital (vốn cố định) is the money used to buy fixed assets, such as: land,
buildings, machinery,…
Trang 5+ Working capital (vốn lưu động) is the money used to buy raw material and pay
the day-to-day expenses, such as: salaries, rent, taxes,… Working capital consists
of inventories and liquid resources needed by a company to carry out trading orproduction
13 How are fixed capital/ working capital? = What is fixed capital/ working capital used for? = For what purposes is fixed capital/ working capital?
+ Fixed capital is used to buy fixed assets, such as: land, buildings, machinery,…
+ Working capital is used to buy raw material and pay the day-to-day expenses,
such as: salaries, rent, taxes,…
14 What is the task (job) the finance manager in monitoring the finance?
In monitoring the finance, the finance manager has to minimize the cost of finance,
the wastage (lãng phí) and misuse (lạm dụng) of finance the risk of investment of
finance He also has to maximize return on the finance and in general they have tomake sure that there are assets on hand to maintain company operations
3 The tasks of finance managers in the monitoring the finance?
a Activities:
- Supervising, controlling financial activities and conditions
- Evaluating (đánh giá) effects caused by financial decisions
- Suggesting necessary solutions and adjustments for business improvements
Trang 6b Objectives:
- Minimize the costs wastage (lãng phí) and misuse (l m d ng) ạ ụ of finance, the risks
of investments
- Maximize the financial efficiency, the return on finance and profitability
15 What is allocation of the financial resource?
Allocation (phân b ) ổ of the financial resource refers to make wise use of the
financial resource available to the company
16 What is acquisition of the financial resource?
Acquisition (s mua l i) ự ạ of financial resource includes: issue shares (c phi u) ổ ế , offer corporate bonds (trái phi u) ế , acquire other companies, merger, restructure
corporations, sell company assets
(Mua l i ngu n tài chính bao g m: phát hành c phi u (c phi u), chào bán trái ạ ồ ồ ổ ế ổ ế phi u doanh nghi p (trái phi u), mua l i công ty khác, sáp nh p, tái c c u t ng ế ệ ế ạ ậ ơ ấ ổ công ty, bán tài s n công ty) ả
17 What are the CFO’s (Chief Finance Officer) functions?
They are planning the finance, raising the finance, investing the finance andmonitoring the finance
18 What is debenture?
Debenture (trái phiếu) is a type of debt instrument that is not secured by physical assets (tài sản hữu hình) or collateral (tài sản thế chấp)
Trang 7a type of loan, often used by companies to raise money, that is paid back over
a long period of time and at a fixed rate of interest
19 What is dilution?
Dilution (việc làm giảm bớt giá trị) is the process or action of making a company’s
shares less valuable by making more shares available (là quá trình ho c hành ặ
đ ng làm cho c phi u c a công ty tr nên ít giá tr h n b ng cách cung c p thêm ộ ổ ế ủ ở ị ơ ằ ấ nhi u c phi u h n) ề ổ ế ơ
20 What is expenditure?
Expenditure (chi tiêu) is the sum of money that an organization or person spends
21 What is wastage?
Wastage is the amount of something that is wasted
What does corporate finance include ?
CF includes planning, raising investing and monitoring of finance in order toachieve the financial objectives of the company
What sources of finance can finance managers think of when they want to raise more capital ?
Finance can be collected from many sources , e.g , shares , debenture, banks ,financial institutions , creditors , etc
Trang 8Two major ways of raising funds for corporation?
V n c a công ty có th đ ố ủ ể ượ c huy đ ng b ng cách vay t các ch n ho c ộ ằ ừ ủ ợ ặ
b ng cách phát hành trái phi u đ l y trái phi u.) ằ ế ể ấ ế
U17: FUNDING THE BUSINESS
Funding the business is a process of raising the capital for operating and running the business in order to maximize the profit
22 What are some sources of raising funds? Source of raising funds includes:
- Issuing new share
- Issuing new bonds
- Trade credit (tín dụng thương mại)
Trang 9- Reinvested earnings (lợi nhuận giữa lại cho sự tái đầu tư)
- Sale of assets
- Banks loan or bank overdraft (dịch vụ thấu chi ngân hàng)
23 How (In what ways) can a company raise capital? / How many ways are there to finance a business?
(There are two main ways of raising more capital for a company: equity financingand debt financing A company can increase its equity by issuing new shares, usingreinvested earnings or selling a part of the company's assets In addition, acompany can raise liabilities by issuing bonds, using trade credit or borrowingmoney from banks or other financial institutions.)
There are 2 ways of financing of business They are debt financing and equityfinancing
- Debt financing includes issuing new bonds, trade credit, bank loans, bank
overdraft
- Equity financing includes issuing new shares, reinvested earnings, sale of assets
24 What is debt financing? / What is equity financing?
- Debt financing (huy động vốn nợ) is borrowing money on credit with promise to
repay the amount borrowed, plus interset
Trang 10Is the process that corporation contributes capital from borrowing for operating and running the business to maximize the profit
- Equity financing (huy động vốn cổ phần) is issuing additional shares of common
stock to an investor
Is the process that corporation contributes capital from issuing shares for operating and running the business to maximize the profit
25 What is the definition of gearing (= leverage)?
Gearing/ Leverage (hệ số vốn) is the relationship between equity capital and
+ High when: borrowing/ issuing bonds
+ Low when: issuing/ selling stocks
27 What is owner’s capital?
The owner’s capital is money provided by the owner of company
Is the capital raised by selling shares
What are 4 types of owner’s capital?
Trang 11- Common capital
- Venture capital
- Angel capital
- Additional owner’s capital
- Owner’s capital is the money invested by the owners of the company
- Venture capital is provided by the venture firms
- Besides, companies can issue and sell stocks on listed or unlisted securitiesmarkets
28 What is the advantage/ disadvantage of owner’s capital?
- The advantage of owner’s capital: in successful times, the owners have a claim
on (có quyền đối với) all the net profit of the company
- The disavantage of owner’s capital: this is the most exposed (rủi ro) form (hình
thức) of capital because owners are the last people to receive net profits
29 What is venture capital?
Venture capital (vốn đầu tư mạo hiểm) is the money provided by venture firms is
a type of equity capital (owner’s capital )which is raised by venture company
30 What are venture firms?
Venture firms are firm interested in (quan tâm) of financing new company or
high-growth company
Trang 1231 What is the advantage/ disadvantage of venture capital?
- The advantage of venture capital: Venture company doesn’t interfere in (can thi
ệp vào) the running of the company
+ It is great chance to raise big funds
- The disadvantage of venture capital: Venture company demands a much faster
and higher rate of return (tỷ suất sinh lời)
+ There is low percentage of the fund gainers
32 How (In what ways) can the company raise capital (raise fund/ raise finance/ raise equity) on the unlisted sercurities market?
The company can raise equity by issuing and selling sercurities on the unlisted
sercurities market (TTCK chưa niêm yết)
33 What is the advantage/ disavantage of unlisted sercurities market? - The
advantage of unlisted sercurities market:
+ Owners don’t lose much control of the company
+ Opportunity to raise capital, especially for unlisted company - The disadvantage
of unlisted sercurities market:
+ Capital financing (khả năng huy độn vốn) is limited (This source of equity is
available only to small and medium companies.)
34 How (In what ways) can raise capital on the Stock Exchange (Listed
Trang 13sercurities market)?
The company can raise equity by issuing and selling sercurities on the stockexchange
35 What is the advantage/ disadvantage of the stock exchange? - The
advantage of the stock exchange:
+ Long-term opportunities of raising capital by issuing fresh shares
+ High liquidity
- The disadvantage of the stock exchange:
+ Difficult for unlisted or small company
+ Lose control of original owners (người sáng lập)
36 What is the stock exchange?
The stock exchange (sàn giao dịch chứng khoán) is a place listed sercurities are
bought and sold
37 What are sources of long-term loans?
long-term debt /det/ is money that does not have to be paid for at least a year after it is borrowed
long-term loan is a loan that is to be paid back over a period of time between three and ten years, and sometimes for as long as twenty years:
Sources include: clearing banks (NH thanh toán bù trừ), merchant banks (NHTM),
Trang 14pension funds (quỹ lương hưu)
38 What must company do in order to get the long-term loans? - The
company must secure (đảm bảo) their debts over their fixed assets - The company must pay interest (tiền lãi)
39 What is the advantage/ disadvantage of long-term loans? - The advantage
of long-term loans:
+ Can raise capital for investments
+ In the successful time, company have a much better net profit
- The disadvantage of long-term loans: In harder times, the owner’s earnings willdrop dramatically Because interest payments soak up most of the company’sprofits
+ The company have to secure the debt over fixed assets
40 Is the high gearing helpful and harmful to the company? It’s helpful and
harmful depending on economic situation:
- In times of prosperity (thịnh vượng), a high gearing will give (đem lại) the
owners a much better return because net profits will be a higher percentage of
equity after payments on the long – term debt
- In harder times, the owners earnings will drop (giảm) dramatically because
Trang 15interest payment soak up (chiếm) most of the company’s profit
41 What is share capital?
Share capital (vốn cổ phần) is the money contributed by shareholders
42 What is security or collateral?
Security/ collateral (tài sản thế chấp) is assets used by the company to secure
their debts
43 What are dividends?
Dividends (cổ tức) are part of the company’s net profit paid to shareholders
A portion of a company’s net profit (the cost of finance) that the corporation pays to shareholders when raising the capital as equity
44 What is capital?
Capital is the money that company uses to operate and develop company is the
money or property (assets) that company use to do business/maximize the profit
45 What is the principal?/ What is interest?
- The principal (vốn gốc) is the sum of money that a company borrowed
- Interest (lãi suất) is a percentage of the principal take to the lender
The cost of borrowing that the corporate pays to shareholders when raising debt
Trang 16capital
46 What is overleverage?
Overleverage (vượt quá khả năng thanh toán) is a situation in which the company
has difficulty in making payment on its debts
47 What is overdraft?
Overdraft (thấu chi) is withdrawal (rút) of money in excess of the credit balance
on a bank account
48 What is “fresh share”?
Fresh share refers to stock offered first time to the public
49 What are shareholders?
Shareholders (cổ đông) are people who invest money and hold shares in the
company
a person who owns shares in a company and therefore gets part of the company's profits and the right to vote on how the company is controlled
50 What is loan capital?
Loan capital (vốn vay) is the money the company get borrowing
51 What are lenders? / What are borrowers?
- Lenders are people who lend money
Trang 17- Borrowers are people who borrow money
OTC/unlisted securities market: is the decentralized market in which unlistedsecurities are traded
Stock Exchange market: is the centralized market in which listed securities aretraded
U18: MANAGEMENT OF WORKING CAPITAL
52 How is profitability determined?
Profitability (khả năng sinh lời) is determined in part bt the way in which a
company manages its working capital
53 What is one of the main (= major/ core/ principal) function of financial management in managing working capital?
One of the main function of working capital managemet is to provide the correct
amount of (đủ) working capital at the right time (kịp thời) and on the right place (đúng nơi) to realize (có được) the greatest return on (lợi nhuận)
investment
54 How many types of working capital are there? = What are 2 types of working capital? = How is working capital divided? = What is permanent working capital/ temporary working capital?
There are 2 types of working capital They are permanent working capital andtemporary working capital
Trang 18- Permanent working capital (VLĐ thường xuyên): is the money tied up in (được gắn với) keeping the the business flowing throughout the year Is the main part of working capital that is used to purchase current assets to remain the business activities throughout the year
- Temporary working capital (VLĐ tạm thời): is the money needed sometime to take account of (xem xét đến) seasonal (thời vụ), cyclical (chu kì) or unexpected fluctuation (thay đổi) in the business
Is the excess /ɪkˈses/ of working capital over the permanent working capital that is needed to meet the business’s fluctuation
55 For what purpose is permanent working capital/ temporary working capital needed/required? = What are permanent working capital and temporary working capital used for?
- Permanent working capital: is tied up in (được gắn với) keeping the business
flowing throughout the year
- Temporary working capital: is needed sometime to take account of (xem xét đế n) seasonal (thời vụ), cyclical (chu kì) or unexpected fluctuation (thay đổi) in the
Trang 1957 What (How) are inventories subdivided into?
Inventories are divided into: inventories of raw material, work in progress andfinished good
58 What is the task of finance manager in managing inventories? (How does corporation manage inentories?)
In managing inventories, the finance manager has to minimize the stocks of rawmaterials, the level of the work in progress and the quantity finished goods
59 What are the roles of financial manager in managing inventories?
- Inventories are divided into: inventories of raw material, work in progress andfinished goods
- In managing inventories, the finance manager has to:
Trang 20+ Minimize the quantity of raw materials, work in progress and finished goods
+ Avoid the vicious circle (vòng luẩn quẩn) in the business
60 What (How) are debtors subdivided into?
Debtors are divided into: debts due to supplier (accounts payable – khoản phải tr
ả) and debts due to customers (accounts receivable – khoản phải thu)
61 What is the task of finance manager in managing debtors?
In managing debtors, the finance manager has to negotiate generous credit termswith supplier but offer minimal credit to customers
62 What are the roles of financial manager in managing debtors? - Debtors
are divided into: accounts payable and accounts receivable
- In managing debtors, the finance manager has to: negotiate generous creditterms with supplier but offer minimal credit to customers
->achieve a balance (đạt được sự cân bằng) in order to:
+ Attract customers and maintain positive relationships with suppliers +
Minimize cash outlay (khoản chi tiền mặt)
63 What (How) is cash subdivided into?
Cash is divided into: cash for normal requirement and cash for abnormalrequirement
Trang 2164 What is the role (task) of finance manager in managing cash?
- Cash is divided into: cash for normal requirement and cash for abnormalrequirement
- In managing cash, the finance manager has to:
+ Ensure that adequate cash is always available for meeting (trang trải) company’s day-to-day debts (nợ hàng ngày)
+ there is also A small reserve (dự trữ) on hand to meet contingencies 65 What is
overdraft facility?
Overdraft facility (cơ sở thấu chi) is a credit agreement (thỏa thuận) with a bank that allow an account holder (chủ tài khoản) to withdraw (rút) money in excess
of the account’s balance (số dư tài khoản)
66 What happens to the production system of a company if its inventories
are controlled too stringently (nghiêm ngặt)?
This leads to the disruption in production
67 What can cause the disruption in production?
This disruption in production is caused by the delay in receiving raw materials
Trang 2210 What does the “just-in-time” philosophy refer to?
- The just-in-time philosophy is an inventory management method in which goodsare received from suppliers only as they are needed
- The just-in-time philosophy is aimed at reconciling these conflicting interestsand keeping inventory costs to a minimum
U19: MARKETING
Marketing is a process through the entire business of a corporation including the pre-production stage, production stage and post- production stage to make selling superflous
1 What does marketing mean?
Marketing refers to all activities a company conducts to acquire and retaincustomers or clients
Marketing is a process in which the company identify the customer’s need to create,design, produce, advertise products, thus satisfy consumer need
68 What selling concept refers to?
Trang 23Selling concept refers to vigorous hard – selling techniques (kỹ thuật bán hàng tác động mạnh mẽ) used to persuade resisting consumers (khách hàng khó tính)
to buy non – essential goods and services
Products are made first and then the producers find how to sell them Thus,products are made to be sold
What is the essential goods and services?
⇨ Essential goods and services are things people can’t live without them What is the non-essential goods and services?
⇨ Non-essential goods and services are thing that make people’s life better
Selling concept means corporation focus on the selling stage
69 What marketing concept refers to?
Marketing concept refers to the producer’s task to find wants and fill them Marketing concept means corporation focus on Marketing activities
Producers find customer’s wants first and then develop and create products thatsatisfy customer’s wants Thus, products are made to be bought
70 What is the diffirent between selling and marketing?
- Objective of marketing is understand the market demand, then develop andcreate new products to satisfy customers’ needs and wants
- Objective of selling is produce the product first and then think how to sell it on
Trang 24the market
71 What are market opportunities?
Market opportunities are posibilities of filling unsatified needs in sectors in
which a company can profitably produce goods or services
72 What is market segmentation?
Market segmentation is dividing a market into distinct (riêng biệt) groups of
buyers based on their requirements or buying habits
is a part of the market including a group of consumers who have the samerequirements or buying habits
73 What is target market?
Target market is a group of potential customers to whom a company wants to sell
its goods and services
74 What are loyal customers?
Loyal customers are regular buyers of a company
75 What is market research/ marketing research?
Market research is collecting, analyzing and reporting data relevant (thích hợp)
to a specific marketing situation
76 What is potential market?
Trang 25Potential market is the market that can be developed in the future
77 What are “product features”? / Explain the term of “product features”?
Product features are characteristics of a product: quanlity, price, reliabilities and
so on
78 What is sale presentative?
Sales presentative is someone who contacts existing and potential customers,
and tries to persuade them to buy goods and services
79 How (Why) is market research important?
The aim of market research is to minimize the risk of launching a product or
service based on the basic of intuition (trực giác) or guesswork (phán đoán)
80 How to do a market research?
They collect and analyze information about the size (qui mô) of a potential market and the consumer’s reactions (phản ứng)
81 What is marketing mix?
- Marketing mix (marketing hỗn hợp) is all various elements (yếu tố) of a marketing program, their integration (sự kết hợp hài hòa), and the amount of effort (nỗ lực) that a company can expand on (đặt vào) them in order to influence
the target market
Trang 26is a combination of factors that can be controlled by a company to influenceconsumers to purchase its products.
- There are 4P of marketing mix They are product, place, promotion, price 82
What are 4Ps (elements) of marketing mix? /
What are features (charactoristic) of product (place/ promotion/ price)?
= What aspects (factors) are consider in product ((place/ promotion/ price)? They are product, place, promotion, price
- Product includes: quality (chất lượng), feature, style, brand name (thương hiệu) , size, packaging (bao bì), service, guarantee (bảo hành)
- Place includes: distribution channels (kênh phân phối), location of points of sale (địa điểm bán hàng), transport (vận chuyển), inventory size
- Promotion (xúc tiến thương mại) includes: advertising, publicity (quảng bá), sale promotion, personal selling (bán hàng trực tiếp)
- Price includes: the basic list price (giá niêm yết cơ bản), discount, the length of payment preriod (thời hạn thanh toán), credit terms
83 What is consumer market?
Consumer market (thị trường tiêu dùng) is market where people buy products for
direct consumption
84 What is producer market/ business market/ industrial market?
Trang 27Producer market (thị trường sản xuất) consists of all the individuals and
organizations that buy goods and services that are used in the production of othergoods, or in the supply of services to others
- Consumer market is a market focused on customers, business that sell productsand services to the end consumer
- Producer market/Industrial or business market is a market that trades producergoods (raw materials, manufactured parts, components,…) Buyers use them toproduce other products rather than for final customer
85 What is distribution channel?
Distribution channel (kênh phân phối) is all the companies or individuals
involved in moving a particular good and service from the producer to theconsumer
86 What are points of sale?
Points of sale are place where goods are sold to customers
87 What is product concept?
Product concept is an idea for a new product, which tested with target consumers
before the actual product is developed
88 What are target consumers?
Target consumers are people who are targeted to buy a certain product
Trang 2889 What is packaging?
Packaging (bao bì) is wrappers (giấy gói) and containers (hộp đựng) in which
products are sold
U20: SETTING THE PRICE
1 What is setting/determining the price?
Setting/Determining the price means determining a figure at which products andservices are exchanged in the market
- In the past, prices were set by buyers and sellers negotiating with each other
- Now, one price is set for all buyers
Trang 2992 How were prices set in the past? / How are price set?
Prices were (are) set by buyers and sellers negotiating with each other
93 How are prices set now?
One price is set for all
buyers
94 What is bargain/ negotiate?
Bargain / negotiate (mặc cả) is discussing prices, conditions to reach satisfactory
agreement
95 How good buyers and sellers arrive at an acceptable (chấp nhận được) price? Through bargaining (mặc cả)
96 What are prices determine/set now?
Prices are determined by demand and
supply
97 What is the importance of prices? / What are roles of prices? / Prove that
(CMR) price plays an important role in the economy?
- Price has operated as major determinant (nhân tố quyết định) of buyer choice
- Price remain one of the most important elements (yếu tố) determining company maket share (thị phần) and profitability (khả năng sinh lời)
Trang 30- Price is the only element in the marketing mix that produces revenue (doanh
thu)
98 Why the mistake are called “common mistake”?
Because many companies make the same mistake on setting the price
99 What are common mistakes when pricing (định
giá)? There are 4 common mistakes when pricing:
- Pricing is too cost oriented (định giá quá hướng vào chi phí)
- Price is not revised (điều chỉnh) often enough to capitalize on (đáp ứng) market
Trang 31- Pricing is too cost oriented (định giá quá hướng vào chi phí)
- Price is not revised often enough to capitalize on (đáp ứng) market changes
- Price is set independently (độc lập) of the rest of the marketing mix
- Price is not varied (đa dạng) enough for different product items and market segments (phân khúc thị trường)
101 How many ways are there to set price in organizations? = How do different organizations handle pricing? / How are prices set (determine/handle) in small companies (large companies/ industries)?
- In small companies, prices are often set by top management (ban quản trị cấp
Pricing department (phòng định giá) is department which set prices or assist
others in determining apropriate prices
103 What is discount?
Discount (giảm giá) is a reduction from the full amount of a price