About This Chapter
Praxis Business Education: Business Finance - Chapter Summary
Prepare for the Praxis Business Education subject test by exploring the roles of financial management in business alongside steps in the financial planning process. Instructors teaching this chapter's video lessons discuss methods for the following:
- Establishing financial controls
- Securing operating funds
- Raising debt and equity capital
- Using short- and long-term financing
We have assembled this collection of instructional videos, transcripts and self-assessment quizzes to help you prepare for the exam. Lessons are taught by experienced instructors, and the topics they discuss are the same ones found on the actual test. Use these resources to brush up on areas you're not quite familiar with and create a study plan that will see you through to exam day.
Praxis Business Education: Business Finance Objectives
Consider using this chapter to shore up your knowledge of the risks and responsibilities associated with managing a business' finances as well as the types of business capital. You'll need to be familiar with these and related topics to successfully answer the 18 accounting and finance questions on the Praxis Business Education exam.
The test takes two hours to complete and consists of 120 total multiple-choice questions. Results on the exam are used by some state education boards to assess your business content area knowledge and award teaching credentials in this area.
1. The 5 C's of Credit
What's your creditworthiness? When a business owner needs a loan from the bank or financial institution, they will go through an evaluation process to determine their eligibility. Business owners need to consider what financial institutes look at. In this lesson you will learn about the process known as the 5 C's of credit.
2. The Role and Responsibilities of Financial Managers
To maximize profits for an organization, companies employ financial management strategies that can be split into three broad categories, including capital budgeting, financing, and dividend policy. Take a closer look at financial management in business and explore the role and responsibilities of financial managers and financial management teams.
3. The Financial Planning Process
Financial planning is a crucial part of a business's profitability and general budget, involving steps to allocate financial resources. Discover the three essential questions to consider in financial plans, cash and profit planning, additional factors, and details in budgeting.
4. Debt Capital Vs Equity Capital
Two avenues for raising capital are debt capital and equity capital. Learn the different means of raising capital in each type, the pros and cons of each type, and securities regulations for raising capital.
5. Sources of Short-Term Financing
Short-term financing refers to any revenue source, such as a cash advance or invoice financing, that is paid off in less than one year. Explore the definition and sources of short-term financing, including trade credit, line of credit, short-term bank loans, and credit cards.
6. Sources of Long-Term Financing
Long-term financing is any means to provide financial resources, such as a bank loan or leasing agreement, that has terms exceeding one year. Review the definition of long-term financing, and explore sources, including commercial loans, stock offerings, debt offerings, and government programs.
7. Liquidity Ratio: Definition, Calculation & Analysis
Financial ratios are used to assess the financial stability of a business or other organization. Learn about liquidity ratios, including their definition, methods for calculation, and processes for analysis of liquidity. Understand the current ratio, acid ratio, and cash ratio, and recognize how these are used to calculate liquidity.
8. What Are Current Assets? - Definition, Examples & Calculation
Current assets are cash plus other assets that can be converted to cash or consumed within the next year. Explore the definition and examples of current assets, such as short-term investments and receivables, and learn how to calculate prepaid expenses.
9. Financial Risk: Types, Examples & Management Methods
Taking a financial risk comes with the possibility of losing money or being unable to pay debts or obligations. Discover the types and examples of financial risks, and learn the management methods that can be used in minimizing and addressing financial risks.
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Other chapters within the Praxis Business Education (5101): Practice & Study Guide course
- Praxis Business: Accounting
- Praxis Business: Personal Finance
- Praxis Business: Foundations of Communication
- Praxis Business: Written & Oral Communication
- Praxis Business: Employment Communication & Career Research
- Praxis Business: Economic Allocation of Resources
- Praxis Business: Economic Systems & Market Structures
- Praxis Business: Role of the Government in Economics
- Praxis Business: Economic Indicators of Growth
- Praxis Business: Entrepreneurship
- Praxis Business: Information Technology Operations and Concepts
- Praxis Business: Technology Tools
- Praxis Business: Computer Applications
- Praxis Business: Programming & Design
- Praxis Business: Foundations of International Business
- Praxis Business: International Business Environment
- Praxis Business: Contract Law
- Praxis Business: Consumer & Computer Law
- Praxis Business: US Court System
- Praxis Business: Marketing
- Praxis Business: Management
- Praxis: Professional Business Education
- Praxis Business Education: Content Knowledge Flashcards