It may not be as visible as marketing or production, but management of a firm’s finances is just as much a key to the firm’s success Financial management —the art and science of managing a firm’s money so that it can meet its goals—is not just the responsibility of the finance department.

Any company, whether it’s a small-town bakery or Whole Foods Market, needs money to operate. To make money, it must first spend money—on inventory and supplies, equipment and facilities, and employee wages and salaries.

securities — Investment certificates issued by corporations or governments that represent either equity or debt. financial management — The art and science of managing a firm’s money so that it can meet its goals. firm’s finances — just as much a key to the firm’s success. capital expenditures — Investments in long-lived assets, such as land, buildings, machinery, equipment, and information services, that are expected to provide benefits over a period longer than one year.

Be able to distinguish between short- and long-term expenses; describe a firm’s main motives in making capital expenditures; distinguish between unsecured and secured short-term loans.