What Are The Ten Basic Principles Of Financial Management?

Principle 1: the trade-off between risk and return - additional risk is needed to compensate for additional risks.

Principle two: time of money value Today's dollar is more than a dollar in the future. valuable 。

Principle three: value should be considered in terms of cash rather than profit.

Principle four: incremental cash flow only increments are related.

Principle five: there is no competition in the market. profit A particularly high project.

Principle six: effective capital market, the market is sensitive and the price is reasonable.

Principle seven: agency problem - the interests of managers and owners are inconsistent.

Principle eight: Taxation affects business decisions.

Principle nine: risk is divided into different categories - some can be eliminated by decentralization and others are not.

Principle ten: moral behavior is to do the right thing, and there is moral confusion everywhere in the financial industry.