One of the most critical aspects of management pertains to the finances of running a firm. Although there are numerous issues facing modern managers with respect to financial management, the following sections will address three of the most ubiquitous—acquisition of outside capital for start-up and growth, management of working capital and cash flow, and the construction and implementation of a capital budgeting process. Accessing the capital markets is fundamental for procuring funds that allow the firm to grow. Working capital involves managing the current assets and liabilities of the firm. Capital budgeting is the process of making long-term fixed asset investments.

Accessing the Financial Markets

In the initial start-up of any firm, management must procure the funds needed to get the business off the ground. These funds may come from a variety of sources, but managers should be aware that all...