1. What are 3 fundamental decisions that are of concern to the
finance team? What is the impact of these on the balance sheet?
The three key fundamental decisions are financial planning and control,
risk management, strategic planning. This affects the balance sheet
because the areas are connected to capital budgeting, financing
decisions, and working capital.
A balance sheet services as a way to understand your debits and
credits. The point of a business is to produce cash flow and measure
productivity, working assets, and human capital. Basically, covering
operating expenses, creditors, and taxes which all show up on the
balance sheet. Whatever is lifted is profit for the business. The finance
team will then develop a plan to generate surplus with that cash or how
to use that profit.
2. Explain the difference between a stakeholder and a stockholder and
why both are important to the success of an organization.
Both stakeholders and stockholders are financially invested and own
shares of the establishment. The major difference between both is that a
stakeholder might be more vested in the firm due to this ownership. The
stockholder is only bonded by capital contributed and a perfect recent
example of this the short sellers of GameStop (GME).
Both are important to the company because the establishment will have
more capital to reinvest. I am sure that capital is vital to any successful
establishment.
Ilie, Livia. “Challenges for Financial Managers in a Changing Economic
Environment.” Procedia Economics and Finance, vol. 27, 2015, pp. 726–
730, 10.1016/s2212-5671(15)01054-0. Accessed 18 Nov. 2019.
