Accounting, Corporate Finance & Shareholder

Before discussing Accounting, Corporate Finance & Shareholder. I want to Ask: Have you ever heard the term "Market"? It must never, even mendefiniskannya. Ever heard the term "Capital Market (Capital Market)"? Of course often. Ever heard of product market? Then, if I ask: Bagimana relationship capital market and product market? How are they interlated? Maybe some one knows, and some may not know, or are not sure know. Ever heard of Corporate Finance? if you know what the relationship with the accounting Corporate finance? Then what is the relationship with shareholders both Corporate Finance and Strategy? All that is important for you to know, especially if you work dibagian accounting and finance. Particularly if you are a Financial Controller, you must know about this. If there is not know, do not worry, we will biacarakan about it in a minute.

To obtain a clear picture of all that, I will talk about from the very beginning .....


Shareholders


Since the 17th century, businessmen began to introduce the name LLC (Limited Liability Company =) is in Indonesia known as limited liability (PT), where responsibility (liability) business within its business activity was limited to the amount of capital (that is realized in the form of shares) invested only. No more.

Business owners (read: shareholders) appoint a director (sometimes several directors) to manage their business. Director who then raised his manager to help manage the business manages. Ranging from operational planning, marketing, human resources, accounting and finance, and to execute plans that have been made, to evaluate it.

Shareholder power to choose (determine) director, appoint independent auditors in the Annual General Meeting of Shareholders, and is entitled to an annual report containing the financial performance of the company, which we are familiar with financial statements.

Okay, related to accounting & financial market there are 2 kinds, namely:
[1]. Capital Market
[2]. Product / Services Market

Next we discuss, one by one, what's the capital market and what products / services market. At the end of the discussion we'll get a relationship between capital market and product market, related to financial issues.


Capital Market

Capital Market (Capital Market) is a market where the investors (shareholders) memperjual buy stocks which we are familiar with the "Stock Exchange (Stock Exchange)". In Indonesia there are so far only 2, namely the Jakarta Stock Exchange and Surabaya Stock Exchange.

Companies usually get funding (both initial and additional) of the shareholders memalui issuance of shares (equity), sometimes also from financial institutions in the forms of loans (debt). Top funds obtained would lead to cost. Cost arising from the use of funds in running the business (business) this is called the Cost of Capital (Burden of Capital).

Cost of Capital consists of:

[-]. Cost Of Equity, in the form: Dividend and Capital Growth, which is part of the benefits paid (read: return) to shareholders.

[-]. Cost Of Debt, in the form: interest (interest), ie a certain amount (read: price) charged by the lender (financial institution / financier).


Product Market

After getting the funds to operate, of course, the company will invest (read: play) funds in raw materials, human resources and technology to be able to buy or sell, hand over the goods or services received. This is called the product market.


Critical Question: So what is the relation between the Capital Market to Market Product?

Relationship Capital Market & Product Market

Focus of the business owners (shareholders) in his accumulation of wealth is: GET LEVEL RATE (COST of Debt) THAT TER-LOW OF CAPITAL MARKET FOR LATER by exploiting DIINVETASIKAN PRODUCT MARKET imperfections.

What is meant by imperfection market product? the gap between supply and demand in various sources (raw materials, human resources, technology and all its circumatnces). That is where the future is expected to obtain the difference, (the difference between a surplus of course) which was later known as PROFIT (profit), which the financial statements will be accumulated in retained earnings, and then distributed (read: return) to shareholders as dividends.

All shareholders would expect the highest gain in a consistent and continuously either from equity (in the form of dividends) or of increasing its stock price in the capital markets from time to time.

If the company (which funds in invetasikan) succeeded in realizing the objectives (goal) set by the shareholder, the shareholder will obtain the highest gains through the acquisition of dividends. The success of shareholder gain high dividends and increased stock value (stock price) from time to time that management relationship with the Capital Market is known or FINANCIAL MANAGEMENT CORPORATE FINANCE. And since the 1990s accounting roles taking an increasingly dominant role in providing tools-tools for those managers to make decisions to mengahasilkan profit (return) high, and the tools and accurate financial information for corporate finance to financial management (financial management) in order to provide value added sharareholder (sva) the highest.



Accounting role in providing tools for regulating the financial and business strategy to achieve maximum shareholder value added is very important. Up-coming post is about Shareholder Value Added, to answer the questions: What is Shareholder Value Added? Why Shareholder Value Added is Crucial? Shareholder Value Added Bagimana measured? Whatever mendrive shareholder value added?. Talk to you on the next post!