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20,000 Total Earnings $ 15,000 Return to $35,000 Stockholders $230,000 = = 50% Leverage Selling Bonds = = % Equity Sale of Stock Chapter 19 Understanding Business Luan Ling Eamp。M School, CAU 1934 8 What trends are affecting the field of financial management? Learning Goal 8 Chapter 19 Understanding Business Luan Ling Eamp。M School, CAU 1935 8 ? Work with top management to develop and implement the firm’s strategic direction ? Reestablish public trust ? Assure stakeholders of honest transactions and reporting ? Maintain a higher profile with their panies’ boards The Changing Role of the CFO Chapter 19 Understanding Business Luan Ling Eamp。M School, CAU 1936 8 Market risk Operational risk Credit risk Weighing the Risks after 9112022 Chapter 19 Understanding Business Luan Ling Eamp。M School, CAU 1937 9 What is risk and how can it be managed? What makes a risk insurable? Learning Goal 9 Chapter 19 Understanding Business Luan Ling Eamp。M School, CAU 1938 9 Strategies to Manage Risk Risk reduction Risk avoidance Selfinsurance Risk transference Risk Management Chapter 19 Understanding Business Luan Ling Eamp。M School, CAU 1939 10 What types of insurance coverage should businesses consider? Learning Goal 10 Chapter 19 Understanding Business Luan Ling Eamp。M School, CAU 1940 10 There must be many similar exposures to peril Losses must be financially measurable Peril must not be likely to affect all parties at same time Company must have the right to set standards for coverage The loss must not be under control of insured Potential loss must be significant Insurance Concepts Insurable Risks Chapter 19 Understanding Business Luan Ling Eamp。M School, CAU 1941 10 Life Health Liability Property Types of Insurance Chapter 19 Understanding Business Luan Ling Eamp。M School, CAU 1942 10 Title insurance Fidelity and surety bonds Theft insurance Business interruption insurance Professional liability insurance Special Types of Business Liability Insurance