Unit 16: COPORATE FINANCE

1. What does the term “corporate finance” refer to?

Corporate finance is a broad term that is used to collectively identify the various financial
dealings undertaken by a corporation, and it also applies to the various methods, procedures and
configurations of financial operations employed by a given company.
2. What is main function of corporate finance?
- To make wise use of the financial resources available to the company.
- The management of investments such as acquiring and selling stocks, bonds, and other
investments ventures related to the other companies.
- Creating and managing the process for issuing shares of stock or offering corporate bonds
to generate resources for expansion project
- When acquisitions of property or other companies, mergers, corporate restructures, or the
selling of company assets is involved, the actions are considered to be part of the corporate
finance function.
3. What are important objectives of corporate finance?
- Make wise use of financial resources
- Develop an operating budget for all financial needs of the company
- Work with other departments to track income generated from various operations and
investments
- Ensure that the corporation is achieving the maximum benefit from available financial
resources while incurring the minimum amount of expenditure required attaining those benefit
4. What does corporate finance include?
Corporate finance includes planning, raising, investing and monitoring of finance
5. In “Planning in the finance” what should financial managers take into
consideration?
They should consider question like:
- How much finance is required by the company?
- What are the sources of finance?
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 - How to use the finance profitably?
6. What sources of finance can finance managers think of when they want to raise
more capital?
They can think of many sources such as shares, debentures, banks, financial institutions,
creditors,…
7. How is the capital of a firm basically classified(đc phân loại)?
The capital of a firm is basically classified into 2 types: fixed capital and working capital
8. How are fixed capital and working capital often used?
- Fixed capital is used to purchase fixed assets like land, buildings, machinery,…
- Working capital is used to purchase raw materials, also used to pay the day to day
expenses like salaries, rent, taxes, electricity bills,…
9. What are the tasks of finance managers in monitoring the finance?
In monitoring the finance:
- The finance manager has to minimize the cost of finance, the wastage and misuse of
finance, and the risk of investment of finance.
- He also has to get maximum return on the finance

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Unit 17: FUNDING THE BUSINESS

1. How can a company raise capital?

A company can raise more money in two ways: debt financing (loan capital) and equity
financing (share capital)
A company can increase its equity by issuing new shares, using reinvested earnings or
selling a part of the company’s assets.
In addition, a company can raise liabilities by issuing bonds, using trade credit or borrowing
money from banks or other financial institutions.
2. What do finance managers need to do to ensure a company’s long term survival and
prosperity?
They need to make decisions about the gearing of the company
3. What is gearing?
Gearing is the relationship between equity capital invested in the business and long-term
debt.
4. What are advantages and disadvantage of owner’s capital?
The advantage of owner’s capital: In successful times, the owners have a claim on all the net
profit of company
The disadvantage of owner’s capital: This is the most exposed form of capital since a return
is received only after all other calls on a company’s profits have been satisfied. In an extreme
case – bankruptcy – the owner’s will be repaid only after everyone else, including employees,
creditors, banks,… has received what they are owed.
5. What are advantages and disadvantage of venture’s capital?
The advantage of venture’s capital: the venture capital company doesn’t usually interfere in
the running of the company
The disadvantage of venture’s capital: the provider usually demands a much faster and
higher rate of return than an owner would expect from his/her own capital
6. What are advantages unlisted sercurities market?
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 The unlisted securities market has the advantage of allowing a company to raise money from
outside investor without losing much control of the company
(Disad: this source of funds is available only to small and medium company)
7. What are advantages and disadvantages of Stock Exchange (listed sercurities
market)?
- Ad: The Stock Exchange has the advantage of being provided the long-term opporunity
of raising capital by issuing fresh shares
- Disad: at least 25% of the equity must be in public hands there by reducing the control of
the original owners
8. What are advantages and disadvantages long term loans?
- Ad: long-term loans provide companies opportunities to raise capital. In times of
prosperity, long term loans can give the owners much better returns because net profits will be a
much higher percentage of equity after interest payments on the long – term debt
- Disad: in hander times, the owner’s earning will drop dramatically because interest
payments soak up most of the company’s profits.
9. What will happen if working capital is raised without a corresponding rise in
production or margins?
If working capital is raised without a corresponding rise in production or margins, there will
be a drop in profit.
10.What is one of the principal functions of financial management?
The principal functions of financial management is to provide the correct amount of working
capital at the right time and in the right time place to realize the greatest return on investment.
11.For what purpose is permanent working capital required?
Permanent working capital is tied up in keeping the business flowing throughout the year
12.For what purpose is temporary working capital needed?
Temporary working capital is needed from time to time to take account of seasonal, cyclical
or unexpected fluctuation in the business.

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Unit 18: MANAGEMENT OF WORKING CAPITAL
1. How can working capital be classified?
Working capital can be classified in 2 ways:
- First, it can be divided into permanent working capital which is used to keep the business
flowing throughout the year and temporary working capital which is used to deal with any
fluctuation in the business
- Second, working capital of company has 3 major applications of inventories, debtors and
cash.
2. What are included in inventories of company?
Inventories can be further divided into inventories of raw materials, work in progress and
finished goods
3. What happens to the production system of a company if its inventories are
controlled too stringently?
If its inventories are controlled too stringently, the production system of a company can be
led to disruption
4. What can cause the disruption in production?
The disruption in production can be caused by the delay in receiving raw materials
5. What does the “just-in-time” philosophy refer to?
The “just-in-time” philosophy is aimed at reconciling these often conflicting interests and
keeping inventory costs to a minimum.
6. What are the tasks of financial management in managing debtors?
It’s the task of finance manager to see that generous credit terms are negotiated with
suppliers but minimal credit is offered to customers.
He also has to attract customers, maintain good relationships with suppliers and minimize
cash outlay.
7. What are the tasks of financial management in managing inventories?
The finance manager has to minimize:
- The stocks of raw materials
- The level of the work in progress
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 - The quantity of finished goods
8. What are the tasks of financial management in managing cash?
It’s the task of the finance manager to ensure that adequate cash is always available for
meeting the company’s day-to-day debts and that there is also a small reserve on hand to meet
contingencies.

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Unit 19: MARKETING

1. What does the “selling concept” assume?

The “selling concept” assumes that resisting consumers have to be persuaded by vigorous hard-
selling techniques to buy non-essential goods and services. Products are sold rather than bought.

2. What does the “marketing concept” assume?

 The “marketing concept” assumes that the producer’s task is to find wants and fill
them. Producer makes product that will be bought. As well as satisfying existing
needs, marketers can also anticipate and create new ones.
3. What does the term “market opportunities” mean?
 “Market opportunities” means possibilities of filling unsatisfied needs in sectors in
which a company can profitably produce goods or services.
4. Why must the company consider the existence of competitors?
 The company must consider the existence of competitors because they always have
to be identified, monitored and defeated in the search for loyal customers.
5. How do most companies undertake market research?
 Most companies undertake market research (GB) or marketing research (US) by
collect and analyze information about the size of a potential market, about the
consumers’ reactions to particular product or service features, and so on.
6. What are the elements of the marketing mix?
 The elements of the marketing mix are: product, place, promotion and price.
7. What aspects are considered in marketing products?
 Aspects to be considered in marketing products include quality, features (standard
and optional), style, brand name, size, packaging, services and guarantee ( bảo
hành)
8. What factors are included in promotion?

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  Promotion groups together advertising, publicity, sales promotion and personal
selling
9. What factors are included in place?
 Place in a marketing mix includes such factors as distribution channels, locations
of points of sale, transport, inventory size, etc.
10.What factors are included in price?
 price includes the basic list price, discounts, the length of the payment period ( kỳ
hạn thanh toán) , possible credit terms, and so on
11.How can you explain 4P of marketing mix?
 They’re products, place, promotion and price

 Products include quality, features, style, brand name, size, packing, services and
guarantee
 Place includes distribution channels, locations of paints of sales, transport,
inventory size
 Promotion groups together advertising, publicity, sales promotion, personal selling
 Price includes the basic list price, discount, the length of the payment period,
possible credit terms
12.Which is larger, consumer market or producer market? Why?
 The producer market is larger than the consumer market because the producer
market contains all the raw materials, manufactured parts and components that go
into consumer goods, plus capital equipment such as buildings and machines,
supplies such as energy and pens and paper, and services ranging from cleaning to
management consulting.

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Unit 20: SETTING THE PRICE

1. What are the important roles of price?

 Prices plays important role in the economy. It’s the major determinant of buyer
choice. It’s one of the most important elements determining market share and
profitability. It’s the only element in the marketing mix that produces revenue.
2. What are the most common mistakes in setting the price?
 Company usually make some common mistake in setting the price:
 Price is too cost oriented
 Price is not revised often enough to capitalize on market changes
 Price is set independently of the rest of the marketing mix rather than as an intrinsic
element of market – positioning strategy.
 Price is not varied enough for different product items and market segments
3. What should companies do to handle pricing well?
 In order to handle pricing well:
 Pricing should not be too cost oriented
 Price should be revised often enough to capitalize on market changes
 Price should be set independently of the rest of the marketing mix rather than as an
intrinsic element of market – positioning strategy.
 Price should be varied enough for different product items and market segments.
4. How are prices set in different types of companies?
Companies handle pricing in a variety of ways. In small companies, prices are often set
by top management rather than by the marketing or sales department. In large companies,
pricing is typically handled by divisional and product-line managers. Top management
sets the general pricing objectives and policies and often approves the prices proposed by
lower levels of management. In industries ( aerospace, railroads,etc) a pricing department
to set prices or assist others in determining appropriate prices.

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Unit 21: WHAT IS ACCOUNTING

1. What is accounting information?

 Accounting information is the means by which we measure and communicate
economic events
2. What is the basic purpose of accounting?
 The basic purpose is to produce accounting information used by decision makers in
making economic decisions and taking specific actions
3. What are three types of accounting information?
 Financial accounting, management accounting, and tax accounting
4. Why is financial accounting is considered as “general purpose” accounting
information?
 Because it is used for so many different purposes
5. What does financial accounting refer to?
 Financial accounting refers to information describing the financial resources,
obligations, and activities of an economic entity (either an organization or an
individual)
6. For what purposes is financial accounting used?
 Financial accounting is designed primarily to assist investors and creditors in deciding
where to place their scarce investment resources. Financial accounting information
also is used by managers and in income tax returns.
7. Who user of financial accounting information?
 User of financial accounting information are managers, investors, tax authorities,
creditors, employees.
8. What does management accounting involve?
 Management (or managerial) accounting involves the development and interpretation
of accounting information intended specifically to assist management in running the
business.
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 9. For what purposes is management accounting information used?
 To run the business. Managers use this information in setting the company’s overall
goals, evaluating the performance of departments and individuals, deciding whether to
introduce a new line of products – and in making virtually all types of managerial
decisions. A company’s managers and employees constantly need information to run
and control daily business operations.
10.Who user of management accounting information?
 User of management accounting information are managers and employees in
company.
11.What is tax accounting?
 Tax accounting refers to the preparation of income tax returns and tax payment
12.Why is “tax planning” more challenging than the preparation of an income tax
return?

“Tax planning” is more challenging than the preparation of an income tax return
because tax planning means anticipating the “tax effects” of business transactions and
structuring these transactions in a manner that will minimize the income tax burden.

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Unit 22: FINANCIAL STATEMENTS
1. Why do businesses need financial statements?
 All businesses need to maintain financial records in order to find out if they are
making a profit
2. What is the other name of the journal?
 This journal is sometimes called the book of original entry
3. What are the tasks of bookkeepers?
 bookkeepers record sales, uses of raw materials, and purchases in the journal and
transfer figures from journals to ledgers
4. What is the ledger?
 The ledger is a book containing all the accounts of a company.
5. What is an account?
 An account is a financial record which contains information about a group of similar
transactions
6. What is accounting?
 Accounting is the design, maintenance, and interpretation of the information recorded
in the accounts
7. What are the tasks of accountants?
 the tasks of accountants are use the information in the accounts to construct financial
statements
8. What are financial statements used for?
 These statements are analyzed by management and used as a basis for business
decisions such as allocation of financial resources, development of new products, and
expansion of operations and it also used for determining income taxes liabilities.
9. How profits are usually split?
 Part of profit goes to the government in taxation; part is usually distributed to
shareholders (stockholders) as dividend, and part is retained by the company.
10.What does the profit and loss account show? ( income statement)
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  The profit and loss account (GB)/ income statement (US) shows earning and
expenditure. It usually gives figures for total sales or turnover and costs and overhead.
11.What does the balance sheet show?
 The balance sheet shows a company’s financial situation on a particular date, generally
the last day of the financial year. It lists the company’s assets, its liabilities and
shareholders’ (stockholders’) funds
12.What do a business’s assets include?
 A business’s assets include debtors or accounts receivable as it is assumed that these
will be paid
13.What do liabilities include?
 Liabilities include creditors or accounts payable
14.What do a company’s net assets consist of?
 A company’s net assets consist of share capital, share premium (GB) or paid-in surplus
(US), and the company’s reserves, including the year’s retained profits.
15.What is the share capital?
 the share capital is money received from the issue of shares
16.What is the share premium ( paid-in sureplus)?
 the share premium is any money realized by selling shares at above their nominal value
17.What is the double-entry bookkeeping?
 The double-entry bookkeeping is every transaction is recorded in one account as a sum
received ad other as a sum paid
18.what are the other names of the cash flow statement?
 the source and application of funds statement, and the statement of changes in financial
position
19.Where is flow of cash in and out of the company recorded?
 flow of cash in and out of the company recorded is in the cash flow statement
20.What does the cash flow statement show?
 This shows the flow of cash in and out of the business between balance sheet dates
21.What do sources of funds include?
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  Sources of funds include trading profits, depreciation provisions, sales of assets,
borrowing, and the issuing of shares
22.What do applications of funds include?
 Applications of funds include purchases of fixed assets or financial assets, payment of
dividends, repayment of loans, and- in a bad year – trading losses.
23.What are 3 common financial statements? What do they show?
 3 common financial statements are the balance sheet, the income statement and cash
flow statement. A balance sheet shows a company’s financial situation on a particular
date. It briefly lists the company’s assets, liabilities and shareholder’s funds. An income
statement shows earning and expenditure. It gives figures for sales, costs and profits. A
cash flow statement shows the flow of cash in and out of the business between balance
sheet dates.

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Unit 25: FINANCIAL ANALYSIS

1. What is financial analysis?

Financial analysis is the selection, evaluation, and interpretation of financial data, along with
other pertinent information, to assist in investment and financial decision-making.
2. For what purpose is financial analysis used internally?
To evaluate issues such as employee performance, the efficiency of operations and credit
policies
3. For what purpose is financial analysis used externally?
To evaluate potential investments and the credit-worthiness of borrowers, among other
things
4. What are different sources of data needed in financial analysis?
The primary source is the data provided by the company itself in its annual reports and
required disclosures. Market data is also available for financial analysis. Market prices of
securities of publicly-traded corporations, stock price indices for industries and for the market
as a whole can be found in the financial press and the electronic media daily. Another source of
information is economic data such as GDP, CPI, Economic data is available from government
and private sources. Besides financial statement data, market data and economic data,
people also need to examine events that may help explain the company’s present condition and
may have a bearing on its future prospects.
5. What is the ratio?
The ratio is a mathematical relation between one quantity and another.
6. What is the financial ratio?
The financial ratio is comparison between one bit of financial information and another.
7. By construction, what can financial ratios be classified into?
By construction, ratios can be classified as a coverage ratio, a return ratio, a turnover ratio,
or a component percentage.
- A coverage ratio is a measure of a company’s ability too satisfy (meet) particular
obligations
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 - A return ratio is a measure of the net benefit, relative to the resources expended
- A turnover ratio is a measure of the gross benefit, relative to the resources expended
- A component percentage is the ratio of a component of an item to the item
8. What are 6 aspects of operating performance and financial condition we can
evaluate from financial ratios?
- A liquidity ratio provides information on company’s ability to meet its short-term,
immediate obligations
- A profitability ratio provides information on the amount of income from each dollar of
sales
- An activity ratio relates information on a company’s ability to manage its resources (that
is, its assets)efficiently
- A financial leverage ratio provides information on the degree of a company’s fixed
financing obligations and its ability to satisfy these financing obligations
- A shareholder ratio describes the company’s financial condition terms of amounts per
share of stock
- A return on investment ratio provides information on the amount of profit, relative to
the assets employed to produce that profit
9. How are financial ratios classified?
(gộp câu trả lời của 7+8)
Ratios can be classified according to the way they are constructed and their general
characteristics. By construction, ratios can be classified as a coverage ratio, a return ratio, a
turnover ratio, or a component percentage. According to their general characteristics, they can
be classified into A liquidity ratio, A profitability ratio, An activity ratio, A financial leverage
ratio, A shareholder ratio and A return on investment ratio

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Unit 26: AUDITING

1. How is auditing done?

It is done by someone other than the person who entered the transactions in the records
2. What is auditing?
Auditing is an accounting function that involves the review and evaluation of financial
records.
3. What do accountants do to maintain an internal audit?
They continuously review operating procedures and financial records a report to
management on the current state of the company’s fiscal affairs. These accountants also report
on any deviations from standard operating procedures.
The internal auditors also make suggestions to management for improvements in the
standard operating procedures. Finally, they check the accounting records in regard to
completeness and accuracy, making sure that all irregularities are corrected
4. What is the aim of internal auditors?
The internal auditors check the accounting records in regard to completeness and accuracy,
making sure that all irregularities are corrected. They seek to ensure that the various
departments of the company follow the policies and procedures established by management
5. What different emphases can be placed on an internal auditor’s report?
The emphasis placed on different parts of the internal auditor’s report varies from company
to company. In some organizations, the auditor’s major or even sole function is to report on the
completeness and accuracy of the books of account. In more progressive companies, greater
attention may be paid to the auditor’s suggestions.
6. What happens if management receives the incorrect information?
If management receives the incorrect information, they receives the false impression that
things are running smoothly because they do not know about the problems that the internal
audit has uncovered.
7. How can management overcome this weakness?
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 To overcome this weakness, management must ensure that reports are received at all levels
with an absolutely objective attitude.
8. What are strengths and weaknesses of internal auditing?
- Strengths of internal auditing are: Thank to internal auditing, the management know the
current state of the company’s fiscal affairs, deviations from standard operating procedures and
receives suggestions for improvements in the standard operating procedures.
- However a weakness exists on internal auditing is that: If a report is unfavorable, it may
not be shown to the person in management who can correct the problem. As a result,
management receives the false impression that things are running smoothly because they do not
know about the problems that the internal audit has uncovered.

 An operational audit a. Is a review of any part of an organization’s operating procedures

and methods for the purpose of evaluating efficiency and effectiveness

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Unit 27: INTERNATIONAL BUSINESS

1. How might underdeveloped countries benefit from international trade?

Underdeveloped countries have developed their economics, increased production of goods,
and met market demands through increased world trade.
2. What 4 factors would contribute to a country’s production efficiency?
- Climate: a certain climate in particular country may allow that country to grow
agricultural products in abundance
- Natural resources such as oil or coal are abundant in other countries
- Labor forces: countries with a large pool of unskilled laborers are able to produce
products which are labor intensive more cheaply than countries with highly paid, skilled labor
forces.
- Geographical location: countries like Singapore and Panama engage in banking and
trading because they are located on world trade routes.
3. What is the main difference between Smith’s theory and Ricardo’s theory?
- The Smith’s theory is a theory of absolute advantage
Adam Smith theorized that in a free market, countries produce whatever they can most
efficiently grow of manufacture, or what it of the greatest advantage to them. In other words, if
they can make more money growing cotton than making cloth, they grow cotton and export it.
Then they import cloth from a country that makes clot more efficiently than it grows cotton 
nếu hỏi ND
- Ricardo refined Smith’s theory to one of comparative advantage
Ricardo refined Smith’s theory to one of comparative advantage. He theorized that an
exporting country does not have to be the most efficient producer of the product, it only has to
be more efficient than that country which imports the product.
4. Explain how exporting countries become wealthy ?
Because a country enjoys an advantage if it exports more than it imports. Wealth accrues to
the exporting country.
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 5. What is the dumping?
Dumping is selling on a foreign market at a price below the cost of production
6. What are two forms of protectionism?
Two forms of protectionism are quotas and tariffs
7. What is a specific tariff?
A specific tariff is a certain amount of tax for each unit of the product.
8. What is an ad valorem tariff?
An ad valorem tariff is based on the value of the product.
9. What is one advantage of tariffs over quotas to a government?
One advantage of tariffs over quotas to a government is to raise revenue for the government
10.Why do tariffs and quotas have different effects on the market?
Because tariff increase cost while quotas restrict supply
11.With a floating exchange rate, what would happen to the exchange value of
currency from a country that exports more than it imports?
If a country is exporting more than it imports, it is receiving foreign currency and has a
balance of trade surplus
12.Explain why the value of the currency of a country that imports more than it
exports would tend to decrease.
If it is importing more than it exports, it is sending money out of the country and has a
balance of trade deficit. That change the demand for the currency of a country and cause its
value to float either downward.
13.What would be a good reason for an exporting company to set up a subsidiary in the
country that imports its products?
Saving transportation costs would be a good reason for an exporting company to set up a
subsidiary in the country that imports its products
14.What is a parent company?
Parent company is company which owns a subsidiary
Or: Exporting companies sometimes set up subsidiaries in the market countries. The larger
company is referred to as the parent company.
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 15.Why might a country encourage foreign investment of the establishment of
subsidiaries of foreign companies?
A country encourage foreign investment of the establishment of subsidiaries of foreign
companies to develop its economy, to provide employment for its population, to lower balance
of trade deficit.
16.What benefits does international business bring to exporting and import countries?
(How can trading nations benefit from international business?)
International business brings benefits to exporting countries and importing countries.
Exporting countries receive money, increase production, expand their market and develop
their economics from exporting goods and services.
Whereas, consumers of the importing countries can have wider choice of goods and services
at lower prices
17.Why and how do gov encourage export ?
- Governments encourage exports because an advantage enjoy if it exports more than it
imports. Wealth accrues to the exporting country.
- Governments have special programs to encourage export such as:
 Providing marketing information
 Establishing trade missions
 Subsidizing exports
 Providing tax benefits and incentives
18.Why and how do gov ristrict imports?
- The governments restrict imports to protect domestic industries, provide domestic
production and employment to the population
- Governments ristrict imports by imposing taxes and quotas.

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Unit 29: TRADE BAARIERS

1. What are trade barriers?

Trade barriers are any of a number of government-placed restrictions on trade between
nations
2. What are reasons for imposing trade barriers?
The first reason is to protect domestic employment
The second reason is to protect relatively young domestic industries
The third reason is to prevent unfair trade practices of foreign firms
The fourth reason is to prevent dumping
The last reason is to protect firms and industries that produce output vital to the security and
defense of the nation.
3. What are the most common used trade barriers?
The 4 most common trade barriers designed to restrict imports are: tariff, quotas, subsidies
and embargoes:
- Tariffs are simply taxes placed on imports. A tariff is added to the price of the imported
goods.
- Quotas on imports are designed to restrict imports and promote exports. A quota is a
quantity restriction placed on a good, service or activity.
- Subsidies are often placed to protect domestic industries. Subsidies may be intended to
make certain key goods affordable to citizens of the nation.
- Embargoes can be the most extreme of trade barriers. Embargoes basically prohibit the
import or export of anything with another country.
4. What the results in using non-tariffs?
Some countries have begun using trade barriers that are not tariffs but have similar effects

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Unit 30

1. What is the narrowest measure?

The narrowest measure of a country’s trade is the merchandise trade balance
2. What is the better of measure of trade?
The better of measure of trade is the current account
3. What does the current account tell us?
The current account tells us which countries have been profitable traders, running a current
account surplus with money in the bank at the end of the year, and which countries have been
unprofitable traders, having imported more than they’ve exported, running a current account
deficit, or spending more than they’ve earned
4. How trade deficits and surpluses are balance?
Trade deficits and surpluses balance are balanced by payments that make up the difference
5. What can a country do if it runs a current account surplus?
It can use the extra money to invest abroad or it can reserves foreign currency.
6. What does a country running a current account deficit have to do?
A country running a current account deficit has to look abroad for loans or investments or be
forced to dip into its own reserves to pay for its excessive imports
7. What is the widest measure of a country’s trade?
The widest measure of a country’s trade is called its balance of payments
8. What does the balance of payments include?
It includes payments abroad, the goods, services, and all transfers of funds that cross
international borders

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