Financial management - Tiếng Anh | Trường Đại học Quy Nhơn

CHAPTER 1: INTRODUCTION TO FM
1. What are 3 types of FM decisions? For each type of decision, give an example
of a business transaction that would be relevant ( ra thi r)
(VD giao d ch kinh doanh c ị ó liên quan) Answer: 
Capital Budgeting ( Ho ch đ ạ nh ngân sác ị
h vốốn vốốn đâầu t ) ư
Ex: Walmart decides whether to open another store would be an important capital budgeting decision 
Capital Structure ( C câốu vốốn) ơ
Ex: Walmart, (Sam) Walton was able to often sell Tide and other Procter & Gamble
products before having to pay P&G effectively using P&G's money to grow 
Working capital management ( Qu n lý vốốn l ả u đ ư ng) ộ
( CAssets- Cliabilities)
Ex: Retailers squeeze suppliers and keep inventory low to generate working capital.
Consumer goods manufacturers and retailers receive significant revenue through Wal-Mart's retail channel
(nhà bán l siêốt ch ẻ t các
ặ nhà cung câốp và gi hàng tốần kho ữ m ở c thâốp đ ứ t ể o ạ vốốn l u ư đ ng. Các nhà s ộ
n xuâốt hàng tiêu dùng và bán ả l nh ẻ n đ ậ c doanh thu đáng k ượ thống ể qua kênh bán l c ẻ ủa Wal-Mart)
2. What are the 4 primary disadvantages of the sole proprietorship and
partnership forms of business organization? What benefits are there to
these types of business organizations as opposed to the corporate form? ( 4 bâốt l i c ợ a DN t ủ nhân và cốn ư g ty h p danh? L ợ i ích c ợ a
ủ các lo i hình DN này đốối v ạ i ớ cống ty?) Answer: 4 disadvantages: 
Unlimited liability for business debts on the part of the owners 
Limited life of the business 
Difficulty of transferring ownership 
Hard to raise capital ( inability to raise cash for investment) (Trách nhi m vố h ệ n đốối v ạ i các kho ớ n n ả ki ợ nh doanh c a ch ủ s ủ h ở u ữ Tu i th ổ c ọ a doanh nghi ủ p có h ệ n ạ Khó chuy n quyêần s ể h ở u ữ
Khó huy đ ng vốốn) ộ Benefits:  Partnership: -
Easy and inexpensive to form (dêễ dàng và ko mắốc đ hình thành) ể 
Sole proprietorship: -
The simplest type of business to start and the least regulated form of the
organization (hình th c ít quy đ ứ nh nhâốt c ị a t ủ ch ổ c) ứ -
The owner of the Sole proprietorship keeps all the profits.
3. What is the primary disadvantage of the corporate form of organization?
Name at least 2 advantages of corp organization. Answer: -
The primary disadvantage of the corporate is double taxation. It meaning that
corporate profits are taxed twice: at the corporate level when they are earned and
again at the personal level when they are paid out. - 2 advantages: 
Ownership (represented by shares of stock) can be readily transferred and
the life of the corporation is therefore not limited. 
The corporation borrows money in its own name. As a result, the
stockholders in a corporation have limited liability for corporation debts.
The most they can lose is what they have invested.  (Limited liability Ease of transferability Ability to raise capital Unlimited life)
4. In a large corp, what are the 2 distinct groups that report to the chief financial
officer? Which group is the focus of corp finance? ( page 95 Ross)
(Trong m t cống ty l ộ n, 2 nhóm riêng bi ớ t báo cáo c ệ
ho giám đốốc tài chính là gì? Nhóm nào là tr ng tâm c ọ a tài chính doanh n ủ ghi p?) ệ Answer: 
2 groups: The treasurer’s office and the controller’s office
(Vắn phòng th quyễ và vắn phòng ki ủ m soát viên) ể - TO:
Cash and credit manager, capital expenditures, and financial planning - CO:
Cost and financial accounting manager, tax manager, and data processing manager. 
Therefore, the study of corporate finance is concentrated within the functions of the treasure's office.
5. What goal should always motivate the actions of a firm’s financial manager?
(M c tiêu nào nên luốn thúc đ ụ y hành đ ẩ ng ộ c a ng ủ i qu ườ n lý tài chính c ả a m ủ t cống ộ ty?) Answer:
To maximize the current market value (share price) of the equity of the firm (whether its publicly traded or not)
6. Who owns a corp? Describe the process whereby the owners control the firm’s
management. What is the main reason an agency relationship exists (tồồn t i) in ạ
the corp form of organization (? In this context, what kinds of problems can arise? (phát sinh) Answer: 
In the corporate form of ownership, the shareholders are the owners of the firm. 
Process: the shareholders elect the directors of the corporation, then the
directors elect the company's management board. 
Reason: There are the separation between the ownership and the
management in corporation. (The shareholder owns but does not run the
company, whereas the manager does not own but does run the company) (S tách bi ự ệt gi a s ữ h ở u và qu ữ n lý trong cống ty) ả  Problems can arise:
Management may act in its own or someone else's best interests, rather than
those of the shareholders. If such events occur, they may contradict the goal
of maximizing the share price of the equity of the firm. (Ban qu n lý có t ả h ể hành đ ng vì l ộ i ợ ích c a chính h ủ ho ọ c c ặ a ng ủ i k ườ hác h n là l ơ i ợ ích c a các c ủ đống. ổ Nêốu nh ng s ữ ki ự n nh ệ v ư y ậ x y ra, ả
chúng có th mâu thuâễn v ể i m
ớ c tiêu tốối đa hóa giá c ụ phiêốu c ổ a cống ty) ủ
7. Evaluate the following statement: managers should not focus on the current stock
value (gtri cổ phiếu hiện hành) because doing so will lead to an overemphasis on (quá
chú trọng) short-term profits at the expense (bỏ qua) of long-term profits?
(Đánh giá nhận định sau: các nhà quản lý không nên tập trung vào giá trị cổ phiếu hiện tại
(gtri cổ phiếu hiện hành) vì làm như vậy sẽ dẫn đến việc quá chú trọng vào (quá chú trọng)
lợi nhuận ngắn hạn mà bỏ qua (bỏ qua) lợi nhuận dài hạn lợi nhuận? ) Answer:
8. Can our goal of maximizing the value of stock conflict with others’ goals, such as
avoiding unethical or illegal behavior? In particular, do u think subjects like customer
and employee safety, the environment, and the general good of society fit in this
framework or are they essentially ignored? Think of some specific scenarios to illustrate ur answer.
( Mục tiêu tối đa hóa giá trị cổ phiếu của chúng ta có mâu thuẫn với mục tiêu của người
khác, chẳng hạn như tránh hành vi phi đạo đức hoặc bất hợp pháp không? Cụ thể, bạn có
nghĩ rằng các chủ đề như an toàn của khách hàng và nhân viên, môi trường và lợi ích chung
của xã hội phù hợp với khuôn khổ này hay về cơ bản chúng bị bỏ qua? Hãy nghĩ về một số
tình huống cụ thể để minh họa cho câu trả lời của bạn ) Answer: -
Goal of maximizing the value of stock definitely conflicts with other goals such as
avoiding unethical or illegal behavior. (M c tiêu tốối đa hóa giá tr ụ
cị phiêốu chắốc ổ chắốn xung đ t v ộ i các m ớ c tiêu khác nh ụ tránh hành vi phi đ ư o đ ạ c ho ứ c bâốt h ặ p ợ pháp) -
A company can get a lot of value from its stakeholders, for example, customers and
employees, the environment, and society. Businesses that maximize profits while
also having business ethics, not breaking the law, and protecting the environment
and the general good of society, are friendly to everyone, creating favorable
conditions for workers to develop. They will have a long-term profit and grow in a sustainable manner. -
Example: VCB is one of the banks that always follows the State Bank's regulations,
as well as the regulations on ethics and law. As a result, there are many repeat
customers and positive feedback.
9. What does liquidity measure? Explain the trade-off a firm faces between high
liquidity and low liquidity levels C2
(Giải thích sự đánh đổi mà một công ty phải đối mặt giữa mức thanh khoản cao và mức thanh khoản thấp) Answer:
Liquidity measures how quickly and easily an asset can be converted to cash without
significant loss in value. It's desirable for firms to have high liquidity so that they can more
safely meet short-term creditor demands. However, liquidity also has an opportunity cost.
Firms generally reap higher returns by investing in illiquid, productive assets. It's up to the
firm's financial management staff to find a reasonable compromise between these opposing needs.
10. Why might the revenue and cost figures shown on a standard income statement not
be representative of the actual cash inflows and outflows that occurred dủing a period?
(Tại sao các số liệu doanh thu và chi phí có thể hiển thị trên báo cáo thu nhập tiêu chuẩn
không thể hiện rằng dòng tiền và dòng tiền thực tế xảy ra trong một khoảng thời gian? Answer:
Generally accepted accounting principles require the use of accrual accounting instead of
cash basis accounting. So, revenue and expense on the incone statement does not exactly
line up with the cash inflows and outflows for the period, particularly as it relates to
transactions occurring at the beginning or end of the period.
(Các nguyên tắốc kêố toán đ c c ượhâốp nh n r ậ ng rãi yêu c ộ âầu s d
ử ng kêố toán dốần tích t ụ hay vì kêố toán trên c s ơ tiêần m ở t ặ . Vì v y,
ậ doanh thu và chi phí trên báo cáo thu nh p khống ậ kh p chính x ớ
ác v i dòng tiêần vào và d ớ
òng tiêần ra trong kỳ, đ c
ặbi t khi nó liên quan đêốn ệ các giao d ch x ị y ra vào đâầu h ả o c cuốối kỳ ặ .)
11. In preparing a balance sheet, why do you think standard accounting practice focuses
on historical cost rather than market value? Answer:
Historical costs can be objectively and precisely measured, whereas market values can be
difficult to estimate, and different analysts would come up with different numbers. Thus, there
is a tradeoff between relevance (market values) and objectivity (book values).
12. Suppose a company’s operating cash flow has been negative for several years
running. Is this necessarily a good sign or a bad sign? ( Gi s ả dòng tiêần ho ử t đ ạ ng ộ c a m ủ t cống ty b ộ âm trong v ị ài nắm ho t đ ạ ng. Đây nhâốt ộ
thiêốt là m t dâốu hi ộ u tốốt hay m ệ t dâốu hi ộ u xâốu?) ệ Answer: -
That may be a bad sign for an established company, but it is quite normal for a start-
up, the important thing is that the money is spent wisely, not neither the cash flow
from assets is positive or negative.
(Đó có thể không phải là một dấu hiệu tốt cho một công ty đã thành lập, nhưng nó sẽ khá
bình thường đối với một công ty mới thành lập, điều quan trọng là tiền có được chi tiêu một
cách khôn ngoan hay không, chứ không phải dòng tiền từ tài sản là dương hay âm) -
Positive cash flow indicates that a company's liquid assets are increasing, enabling it
to settle debts, reinvest in its business, return money to shareholders, pay expenses and
provide a buffer against future financial challenges. Having a positive cash flow
allows the company to fare better in downturns, by avoiding the costs of financial distress
( Dòng tiền dương cho thấy tài sản lưu động của công ty đang tăng lên, cho phép công ty
thanh toán các khoản nợ, tái đầu tư vào hoạt động kinh doanh, trả lại tiền cho cổ đông, thanh
toán chi phí và cung cấp một bộ đệm chống lại những thách thức tài chính trong tương lai.
Có dòng tiền dương cho phép công ty hoạt động tốt hơn trong thời kỳ suy thoái, bằng cách
tránh được chi phí kiệt quệ tài chính. )
Chapter 2: WORKING WITH FINANCIAL STATEMENTS
13. What effect would the following actions have on a firm's current ratio? Assume
that net working capital is positive. ( ra thi r) Answer:
a. If inventory is purchased with cash, then
there is no change in the current ratio. If inventory is purchased on credit,
then there is a decrease in the current ratio if it was initially greater than 1.0. b. Reducing accounts payable
with cash increases the current ratio if it was initially greater than 1.0. c. Reducing short-term debt
with cash increases the current ratio if it was initially greater than 1.0. d. As long-term debt
approaches maturity, the principal repayment and the remaining interest expense
become current liabilities. Thus, if debt is paid off with cash, the current
ratio increases if it was initially greater than 1.0. If the debt has not yet
become a current liability, then paying it off will reduce the current ratio
since current liabilities are not affected. e. Reduction of accounts
receivables and an increase in cash leaves the current ratio unchanged. f. Inventory sold at cost
reduces inventory and raises cash, so the current ratio is unchanged.
g. Inventory sold for a profit raises cash in excess of the inventory recorded at cost, so the current ratio increases.
14. In recent years, Dixie Co. has greatly increased its current ratio. At the same time,the
quick ratio has fallen.What has happened? Has the liquidity of the company improved?
(Trong những năm gần đây, Dixie Co. đã tăng tỷ lệ thanh toán hiện hành lên rất nhiều. Đồng
thời, tỷ lệ thanh toán nhanh đã giảm. Điều gì đã xảy ra? Tính thanh khoản của công ty có
được cải thiện không?) Answer:
The firm has increased inventory relative to other current assets; therefore, assuming
current liability levels remain mostly unchanged, liquidity has potentially decreased.
15. Explain what it means for a firm to have a current ratio equal to 0.50.Would the firm
be better off if the current ratio were 1.50? What if it were 15.0? Explain your answers. Answer:
- A current ratio of 0.50 means that the firm has twice as much in current liabilities as it does
in current assets; the firm potentially has poor liquidity. If pressed by its short-term creditors
and suppliers for immediate payment, the firm might have a difficult time meeting its obligations.
- A current ratio of 1.50 means the firm has 50% more current assets than it does current
liabilities. This probably represents an improvement in liquidity; short-term obligations can
generally be met com-pletely with a safety factor built in.
- A current ratio of 15.0, however, might be excessive. Any excess funds sitting in current
assets generally earn little or no return. These excess funds might be put to better use by
investing in productive long-term assets or distributing the funds to shareholders.
16. Fully explain the kind of information the following financial ratios provide about a firm:
(Giải thích đầy đủ loại thông tin mà các tỷ lệ tài chính sau đây cung cấp về một công ty: Answer:
a. Quick ratio provides a measure of the short-term liquidity of the firm, after removing the
effects of inventory, generally the least liquid of the firm's current assets.
b. Cash ratio represents the ability of the firm to completely pay off its current liabilities
balance with its most liquid asset (cash).
c. Total asset turnover measures how much in sales is generated by each dollar of firm assets.
d. Equity multiplier epresents the degree of leverage for an equity investor of the firm; it
measures the dollar worth of firm assets each equity dollar has a claim to. e. Long-term debt ratio
f. Times interest earned ratio provides a relative measure of how well the firm's operating
earnings can cover current interest obligations.
g. Profit margin is the accounting measure of bottom-line profit per dollar of sales.
h. Return on assets is a measure of bottom-line profit per dollar of total assets.
i. Return on equity is a measure of bottom-line profit per dollar of equity.
j. Price-earnings ratio reflects how much value per share the market places on a dollar of accounting earnings for a firm
e. Equity multiplier represents the degree of leverage for an equity investor of the firm; it
measures the dollar worth of firm assets each equity dollar has a claim to.
18. Why is the DuPont identity a valuable tool for analyzing the performance of a firm?
Discuss the types of information it reveals compared to ROE considered by itself. ( ra thi r) Answer:
Return on equity is probably the most important accounting ratio that measures the bottom-
line performance of the firm with respect to the equity shareholders. The Du Pont identity
emphasizes the role of a firm's profitability, asset utilization efficiency, and financial leverage
in achieving a ROE figure. For example, a firm with ROE of 20% would seem to be doing
well, but this figure may be misleading if it were a marginally profitable (low profit margin)
and highly levered (high equity multiplier). If the firm's margins were to erode slightly, the
ROE would be heavily impacted.
19. In recent years, several manufacturing companies have reported the cash flow from
the sale of Treasury securities in cash from the operations section of the statement of
cash flows. What is the problem with this practice? Is there any situation in which this practice would be acceptable?
(Trong những năm gần đây, một số công ty sản xuất đã báo cáo dòng tiền từ việc bán chứng
khoán Kho bạc bằng tiền mặt từ phần Hoạt động của Tuyên bố về dòng tiền. Vấn đề với thực
tiễn này là gì? Có bất kỳ tình huống nào trong đó thực hành này sẽ được chấp nhận? Answer:
Reporting the sale of Treasury securities as cash flow from operations is an accounting
"trick," and as such, should constitute a possible red flag about the companies accounting
practices. For most companies, the gain from a sale of securities should be placed in the
financing section. Including the sale of securities in the cash flow from operations would be
acceptable for a financial company, such as an investment or commercial bank.
20. Suppose a company lengthens the time it takes to pay suppliers. How would this
affect the statement of cash flows? How sustainable is the change in cash flows from this practice? Answer:
Increasing the payables period increases the cash flow from operations. This could be
beneficial for the company as it may be a cheap form of financing, but it is basically a one-
time change. The payables period cannot be increased indefinitely as it will negatively affect
the company's credit rating if the payables period becomes too long.
CHAPTER 3: Long-term financial planning and growth
21. Why do you think most long-term financial planning begins with sales forecasts? Put
differently, why are future sales the key input?
(Tại sao bạn nghĩ rằng hầu hết hoạch định tài chính dài hạn bắt đầu với dự báo bán hàng?
Nói cách khác, tại sao doanh số trong tương lai là đầu vào chính?) Answer:
The reason is that, ultimately, sales are the driving force behind a business. A firm's assets,
employees, and, in fact, just about every aspect of its operations and financing exist to directly
or indirectly support sales. Put differently, a firm's future need for things like capital assets,
employees, inventory, and financing is determined by its future sales level.
22. Do you think the company would have suffered the same fate (số phận) if its product
had been less popular? Why or why not?
CHAPTER 4: DISCOUNTED CASH FLOW VALUATION, STOCK VALUATION
23. There are four pieces to an annuity present value. What are they? Answer:
The four pieces are the present value (PV), the periodic cash flow(C), the discount rate(r),
and the life of the annuity(t).
24. As you increase the length of time involved, what happens to the present value
of an annuity? What happens to the future value?
Answer: Assuming positive cash flows and interest rates the present value decreases. The
future value increases when the compounding period is shorter because interest is earned
on the previously accrued interest.
25. What happens to the future value of an annuity if you increase the rate? What happens to the present value?
Answer: The future value gets larger as you increase the interest rate. The present value
gets smaller as you increase the discount rate.
26. What happens to the future value of a perpetuity if interest rates increase?
What if interest rates decrease?
Answer: If the rate of periodical payments is lower than the interest rate, the future value
decreases. If the rate of periodical payments is higher than the interest rate, the future value decreases.
27. Why does the value of a share of stock depend on dividends?
Answer: Because share prices represent future cash flows, future dividend streams are
incorporated into the share price, and discounted dividend models can help analyze a stock's value.
28/ A substantial percentage of the companies listed on the NYSE and NASDAQ don't
pay dividends, but investors are nonetheless willing to buy shares in them. How is
this paid while the value of a share of stock depends on dividends?
Answer: Investors believe the company will eventually start paying dividends (or be sold to another company).
29. Under what circumstances might a company choose not to pay dividends?
Answer: Because it wants to invest as much as possible into further growth so firms that
believe they can increase value by reinvesting their earnings will choose not to pay dividends.
30. Suppose a company has a preferred stock issue and a common stock issue. Both
have just paid a $2 dividend. Which do you think will have a higher price, a share of
the preferred or a share of the common?
Answer: The common stock probably has a higher price because the dividend can grow,
whereas it is fixed on the preferred. However, the preferred is less risky because of the
dividend and liquidation preference, so it is possible the preferred could be worth more,
depending on the circumstances.
31. Based on the dividend growth model, what are the two components of the total
return share of stock? Which do you think is typically larger?
Answer: The two components are the dividend yield and the capital gains yield. For most
companies, the capital gains yield is larger. This is easy to see for companies that pay no
dividends. For companies that do
pay dividends, the dividend yields are rarely over five percent and are often much less.
32. Evaluate the following statement: Managers should not focus on the current
stock value because doing so will lead to an overemphasis on short-term profits at
the expense of long-term profits?
Answer: Presumably, the current stock value reflects the risk, timing, and magnitude of all
future cash flows, both short-term and long-term. If this is correct, then the statement is false.
CHAPTER 5: Project analysis and evaluation
33. What is forecasting risk? In general, would the degree of forecasting risk be greater
for a new product or a cost-cutting proposal ? Why? Answer:
Forecasting risk is the possibility that we will make a bad decision because of errors in the projected cash flows.
The danger is greatest with a new product because the cash flows are probably harder to
predict. A new product also requires more attention from the consumer in terms of
competition. The correlation between projections and history is mostly unclear because a new
product may be completely unproven. Conversely, cost-cutting is simply an iterative
modification of the current state.
( Mối nguy hiểm lớn nhất với một sản phẩm mới vì dòng tiền có thể khó dự đoán hơn. Một
sản phẩm mới cũng đòi hỏi sự chú ý nhiều hơn từ người tiêu dùng về mặt cạnh tranh. Mối
tương quan giữa các dự đoán và lịch sử hầu như không rõ ràng vì một sản phẩm mới có thể
hoàn toàn chưa được chứng minh. Ngược lại, cắt giảm chi phí chỉ đơn giản là một sửa đổi
lặp đi lặp lại của trạng thái hiện tại.)
34. What is the essential difference between sensitivity analysis and scenario analysis? Answer:
With a sensitivity analysis, one variable is examined over a broad range of values.
With a scenario analysis, all variables are examined for a limited range of values
35. Airlines offer an example of an industry in which the degree of operating leverage is fairly high. Why? Answer:
Fixed costs are relatively high because airlines are relatively capital-intensive (and
airplanes are expensive). Skilled employees such as pilots and mechanics mean relatively
high wages which, because of union agreements, are relatively fixed. Maintenance expenses
are significant and relatively fixed as well.
(Chi phí cốố đ nh tị ng đốối cao v ươ
ì các hãng hàng khống t ng đốối thâm d ươ ng vốốn (và máy ụ
bay đắốt tiêần). Lao đ ng có tay n ộ
ghêầ cao nh phi cống và t ư h c ợ khí có ơ nghĩa là m c l ứ ng ươ t ng đốối ca ươ o, vì các th a thu ỏ n cống đoàn, t ậ ng đốối c ươ
ốố đ nh. Chi phí b ị o trì là đáng k ả ể và t ng đốối cũng c ươ ốố đ nh.) ị
36. As a shareholder of a firm that is contemplating a new project, would you be
more concerned with the accounting break-even point, the cash break-even point,
or the financial break-even point? Why? (Là m t c ộ đống c ổ a m ủ t
ộ cống ty đang d tính m ự t d ộ ự án m i, b ớ
n seễ quan tâm nhiêầu ạ h n đêốn đi ơ
m hòa vốốn kêố toá ể
n, đi m hòa vốốn tiêần m ể t ho ặ c đi ặ
m hòa vốốn tài chính? T ể i ạ sao?) Answer:
From the shareholder perspective, the financial breakeven point is the most important.
Because the financial break-even point tells me the volume of sales, the company needs to
achieve to add value to my shares. (T góc đ ừ c đống, đi ộ ổ m hòa vốốn tài c ể
hính là quan tr ng nhâốt. B ọ i vì đi ở m hòa vốốn tài ể
chính cho tối biêốt khốối l ng bán hàng mà cốn ượ g ty câần đ t đ ạ c đ ượ tắng thêm giá tr ể cho ị c phiêốu c ổ a tối.) ủ
37. Assume a firm is considering a new project that requires an initial investment
and has equal sales and costs over its life. Will the project reach the accounting,
cash, or financial break-even point first? Which will it reach next? Last? Will this ordering always apply? ( Gi s ả m ử t cống ty đang xe ộ m xét m t d ộ án m ự i đòi h ớ i m ỏ t kho ộ n đâầu t ả ban đâầu và có ư
doanh thu và chi phí bắầng nhau trong suốốt vòng đ i c ờ a nó. D ủ án seễ đ ự t ạđêốn đi m hòa ể
vốốn kêố toán, tiêần m t ho ặ c tài chính tr ặ
c tiên? Nó seễ tiêốp c ướ n c
ậái nào tiêốp theo? Cuốối? Th t
ứ này seễ luốn đ ự c áp d ượ ng?) ụ Answer:
The project will reach the cash break-even first, the accounting break-even next, and finally,
the financial break-even. For a project with an initial investment and sales after, this
ordering will always apply. The cash break-even is achieved first since it excludes
depreciation. The accounting break-even is next since it includes depreciation. Finally, the
financial break-even, which includes the time value of money, is achieved.