Steven W. Simmons Sr.
University of Phoenix Business Structures
Fin/571 – Corporate Finance
Oscar Lewis August 16, 2014

Business Startup When making important business decisions, the concepts of corporate finance tend to be the best model to use. These concepts offer proven methods, which improve the financial success. Discussed below are basic corporate financial concepts, which can be applied and yield positive results.
Principles of Corporate Finance When dealing with business investments most commercial entities have used corporate financing in the company. The principle of self-interested behavior is the principle which creates a financial advantage for all parties involved when the playing field is equal or all components associated with the deal are equal. As we strive to gain a deeper comprehension of business transactions through human behavior we find that each of the 12 principles carry invaluable weight to the success or failure of the company. Comparative advantage, diversification, options, risk-return tradeoff, signaling, and valuable ideas are some of the principles used in business dealings. Financial principles, financial markets, and business ethics form a foundation for the financial decisions that managers routinely make.
Accounting Net Income and Cash Flows
Changing a business from one process or industry to another will completely alter the process of recording business transactions. For a company to be considered profitable or successful, the cash flow must be accounted for accurately. The income statement contains noncash expenses and accruals and this is why net income is not an accurate measure of cash flow. This is also the reason for requiring a statement of cash flows and implementing an accrual accounting process, which can identify operating income or