Financial Management and Corporate Finance

Posted on Mar 9, 2025 in Economy

What is Financial Management?

It achieves the maximization of our income.

Analysis of Financial Opportunities: Transforming savings into efficient investments, requiring attention to financial market offerings, seeking minimal risk with maximum utility.
Managing Money: Adequately accounting for income and expenditure, and properly analyzing ways to keep track of money, are options to raise funds.
Investments and Assets: Each purchase or investment should mean growth in finances, analyzed in terms of financial productivity.

The science of finance has three key areas:

Money Markets and Capital: This area analyzes macroeconomics and interest rates, short and long-term commercial credit financing, financial regulations, and financial instruments.
Investments: Focuses on financial decisions of individuals and businesses associated with the formation of portfolios.
Corporate Finance (Financial Administration): Relates to the actual management of any enterprise.

The main objective of any business is to respond by producing a good or service to meet market demand, in order to create value.

Transnational Corporations (TNCs): Those made primarily with national capital that expand beyond their borders to settle or enter other markets.
Multinational Enterprises (MNEs): Have capital contributions from different countries and participate in different international markets.

A legally constituted entity separate from its owners.

Advantages:

Disadvantages:

Institutional Investors: Financial intermediaries or authorized private financial advisors offering investment advisory services for a fee.
Individual Investors: Those who manage their funds personally to achieve their financial goals.

Banco de Mexico: Its purpose is to provide the economy with national currency, with its primary objective being to achieve stability in the currency’s purchasing power.
Financial Leasing: Provides businesses with the process of acquisition, renovation, and modernization of fixed assets such as equipment and machinery.
Factoring Companies: Allow for greater resources, providing short-term financing to convert accounts receivable into cash.
General Warehouses: A link between banking and activities inherent to the production process, providing brokerage services and support for financing the commercial phase of production and inventories.
Credit Unions: Trade associations under federal grant; they can form an association to create an auxiliary credit organization.
Savings and Loan Companies: Aimed at attracting resources exclusively from their partners.
Exchange Houses: Their main activity is buying, selling, and exchanging domestic or foreign currency and metal pieces.

Fidelity: Guarantee compensation for damages.
Judicial: Ensure compliance with duties.
General and Administrative: Responsible for ensuring compliance with general obligations.
Credit: The legal and operational tool that guarantees the obligation.