Introduction to Financial Management free essay sample

MGT201 (Financial Management) MGT201 Lecture No. 01 Introduction to Financial Management Learning objectives: The purpose of this lecture is to provide you with an overview of financial management. After finishing this lecture, you would be able to have a better understanding of the following. Definition of financial management Significance of financial management for non-finance students and professionals Important concepts and areas in financial management The position of financial managers in organizational hierarchy and their respective work domains. Different business legal entities, their advantages and limitations. The external and internal business environments and their relevance to financial management. Different types of financial and real assets markets. What is FM? FM is the management of financial resources – how to best find and use investments and financing opportunities in an ever-changing and increasingly complex environment. Why should CS majors study FM? First of all, financial management is a core life skill; almost every one needs to understand some concepts of finance to manage his/her business personal finances. We will write a custom essay sample on Introduction to Financial Management or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page It is generally and quite rightfully said, â€Å"Money makes the world go round†. Finance is like a life-blood for a company. Even the best of the companies and CEOs go out of the business because of poor financial management policies. Management Information Systems (MIS) and Information Technology (IT) are just a part of the overall corporate strategy which runs on finances, the major resource. So the computer sciences professionals need to have an understanding of the financial concepts to understand and contribute to the overall corporate strategy. Financial Engineering is an upcoming field that requires people with CS, math/science, and finance background. Financial engineering is the application of engineering methods to finance. One important area of study is the design, analysis, and construction of financial contracts to meet the needs of enterprises. This field is experiencing an increased demand for professionals, especially those who are trained in both the underlying mathematics/computer technologies and finance. Page 1  © Copyright Virtual University of Pakistan MGT201 (Financial Management) Definitions Finance: Finance is the science of managing financial resources in an optimal pattern i. e. the best use of available financial sources. Finance consists of three interrelated areas: 1) Money Capital markets, which deals with securities markets financial institutions. 2) Investments, which focuses on the decisions of both individual and institutional investors as they choose assets for their investment portfolios. 3) Financial Management, or business finance which involves the actual management of firms. Major Areas Concepts of Financial Management Following are some of the important areas and concepts of financial management, which would be discussed in detail in the lectures to come. Analysis of Financial Statements: Analysis of financial statement is one of the most common techniques of financial analysis, in which the financial performance and financial health of a company are analyzed based on its past performance. The following financial statements are used in the analysis process. †¢ Profit Loss Statement or Income Statement Income statement reflects the operating efficiency or profitability of a company as a result of its operations along with the net profit available to the shareholders for a given year (usually one accounting period). This statement provides the analyst with some insight into the financial performance of the company. Balance Sheet Balance Sheet is a snap-shot of an organization’s financial health at a particular time. It shows what assets are owned by the business and the sources of acquiring these assets. Statement of Shareholders’ equity Statement of shareholders’ equity provides the share of the owners in the business. Statement of Cash Flows Statement of cash flows explicitly reflects the cash movement (inflows and outflows) during the operations in an accounting period. o o o Taken together, these statements give an accounting picture of the firm’s operations and financial position. Financial statements report what has actually happened to the assets, earnings, and dividends over the years. The analysis of the information contained in these statements help management of the organization to Page 2  © Copyright Virtual University of Pakistan MGT201 (Financial Management) evaluate the performance and activities of the concern; it also helps the investors and creditors to have an idea of the profitability potential and creditworthiness of the business. Investment Decisions Capital Budgeting: Investment decisions are the most critical as they usually involve huge sums of money and these decisions are likely to bring prosperity or doom to a business. A company’s future income depends on how much investment is made, in what type of assets, and how these assets add to the overall value of the company. Capital budgeting is a term strictly related to investment in fixed assets; here, the term capital refers to the fixed assets that are used in production, while budget is a plan which details projected cash inflows and outflows over some future period. The following concepts and techniques are employed while analyzing investment decisions. o Interest rate formulas o Time Value of Money o Discounted Cash Flows o Net Present Value o Internal Rate of Return Risk Return: Investors, individual or institutional, invest their money with the expectations of earning a return on their investment. While investors wish and attempt to earn maximum return, they are constrained by risk. How the risks and returns are related and how do investors make a choice of their portfolios is important for investment decision making. Following concepts and theories would be discussed while discussing the risk-return choices of the investor: o o o o Uncertainty Risk Portfolio Theory Capital Asset Pricing Model Corporate Financing Capital Structure: When a firm plans to expand, it needs capital or funds. Acquisition of funds is considered to be a primary responsibility of a finance department in an organization. There are numerous ways to acquire funds, i. e. , finances can be raised in the form of debt or equity. The proportion of debt and equity constitutes the capital structure of the firm. Financial experts attempt to find a combination of debt and equity that could increase the overall value of the company, i. e. , they try to find the optimal capital structure. The following concepts would be used to understand how an optimal capital structure could be attained. Cost of Capital Leverage Dividend Policy Page 3  © Copyright Virtual University of Pakistan o o o MGT201 (Financial Management) o Debt Instruments Valuation: Asset or company valuation is important not only for financial managers, but also for creditors and investors. It is important to know the value of the company or its assets to make important financing and investment choices. Different valuation techniques and factors that influence the value of a company or its financial instruments would be discussed in this section. o o o o Share Bond Option Corporate Working Capital Inventory Management: Working capital and inventory management pertains to the effective management of current assets. As we will see, an optimal and effective utilization of working capital and inventory increases the operating efficiency of the firm. International Finance Foreign Exchange: With the increasing importance of international trade and global markets, the role of international finance has increased manifold. In a global environment, the finance managers have more choices pertaining to investing and financing than ever before. However, it is important to understand the implications of working in a global environment, since fluctuations in the currency rates can convert a good financing or investment decision into a bad one. This section of the course would discuss the international financial environment and the financial implications of working in a global environment. Organizational Structure (Who does the FM work? ) Chief Executive Officer (CEO) Chief Financial Officer (CFO) Treasurer Controller Cash Investment Accounts Capital Budgeting Audit Capital Structure Inventory Page 4  © Copyright Virtual University of Pakistan MGT201 (Financial Management) Business Legal Entities †¢ Sole Proprietorship : It is an unincorporated business owned by one individual. Going into a business as a sole proprietor is simple – one merely has to begin business operations. Proprietorship consists of 80%of the total number of businesses worldwide. Advantages: i. ii. iii. It is easily inexpensively formed. It is subject to few government regulations. The business pays no corporate income tax; only personal income tax is paid by the proprietor. Limitations: i. ii. It is difficult for a proprietorship to obtain large sums of capital. The proprietor has unlimited personal liability for the business debts, which can result in losses hat exceed the money invested by him in the business. The life of the business organized as proprietorship is limited to the life of the individual who created it. iii. Partnership: A partnership exists whenever two or more persons associate to conduct a noncorporate business. It could be registered or unregistered. Advantages: i. ii. Limitations: i. ii. iii. iv. Unlimited Liability. Limited life of the organization. Difficulty of transferring ownership. Difficulty of raising large amounts of capital. Low cost involved Ease of formation. Corporation: A corporation is a limited company and a separate legal entity registered by the government. It is separate distinct from its owners managers. It Can be Private Limited Page 5  © Copyright Virtual University of Pakistan MGT201 (Financial Management) (Pvt. Ltd. ) or Public Limited (which may be listed on Stock Exchange). The businesses in the form of corporations control 80% of global sales of products and services. Advantages: i- Unlimited life: A corporation can continue even after the death of its original owners. ii- Easy transferability of ownership interest: Ownership interests can be divided into shares of stock, which in turn can be transferred far more easily than can proprietorship partnership interests. ii- Limited Liability: The liability of the shareholders is limited up to the extent of nominal value of shares held by them. Creditors and banks cannot confiscate personal properties of director shareholders in case of its bankruptcy. Limitations: Double Taxation: Corporate earnings may be subject to double taxation – the earnings of the corporation are taxed at corporate level, and then any earnings paid out as dividends are ta xed again as income to the stockholders. ii. Legal Formalities: Setting up a corporation, and filing many official documents, is more complex and time consuming than for a proprietor ship or a partnership Hybrids (Mixed): Hybrid organizations are specialized types of partnerships, which combine the limited liability advantage of a corporation with the tax advantages of a partnership. S-Type Corporation: S- Type corporations are Limited Liability Corporations without double taxation. In a regular corporation, the company itself is taxed on business profits. In addition, the owners pay individual income tax on money that they draw from the corporation as salaries, bonuses, or dividends. In contrast, in an S corporation, all business profits pass through to the owners, who report them on their personal tax returns (as in sole proprietorships, partnerships, and Limited Liability Companies). The S corporation itself does not pay any income tax, although a co-owned S corporation must file an informational tax return like a partnership or Limited Liability Companies – to tell the tax authorities what each shareholders portion of the corporate income is. i. Page 6  © Copyright Virtual University of Pakistan MGT201 (Financial Management) LLP: Limited Liability Partnership (LLP) is also a form of partnership with allows limited liability to the owners and avoids double taxation. These organizations are similar in many ways to the S Corporations; however, LLPs offer more flexibility and benefits to the owners. PC: Personal Corporations ( PC) or Professional Corporations are generally formed by professionals to protect them against litigations. Professionals like doctors, lawyers and accountants prefer to register their business as Professional Corporations. Balance Sheet – An FM Perspective Page 7  © Copyright Virtual University of Pakistan MGT201 (Financial Management) Internal and External Business Environment Internal Business Environment: Internal environment of business normally consists of the following. i. Finance ii. Marketing iii. Human Resources iv. Operations (Production, Manufacturing) v. Technology vi. Other Functions (Logistics, Communications) External Business Environment: The following business environment factors outside an organization have a profound effect on the functions and operations of an organization. . ii. iii. iv. v. vi. Customers Suppliers Competitors Government/Legal Agencies Regulations Macro Economy/Markets: Technological Revolution Page 8  © Copyright Virtual University of Pakistan MGT201 (Financial Management) An analysis which is used in a business is called SWOT Analysis. SWOT is an acronym where S stands for Strengths W stands for Weaknesses O stands for Opportunities T stands for Threat s Strengths and weaknesses are within an organization, i. e. , they pertain to the internal environment of the organization. Opportunities and threats, on the other hand, pertain to the external environment, i. e. , outside the organization. Financial Markets †¢ Capital Markets: These are the markets for the long term debt corporate stocks. Stock Exchange: A stock exchange is a place where the listed shares, Term finance certificates (TFC) and national investment trust units (NIT) are exchanged and traded between buyers and sellers. Long term bonds: Long term government corporate bonds are also traded in capital markets. Money Markets Money market generally is a market where there is buying and selling of short term liquid debt instruments. (Short term means one year or less). Liquid means something which is easily encashable; an instrument that can be easily exchanged for cash. Following financial instruments are traded in money markets. Short term Bonds o Government of Pakistan: Federal Investment Bonds (FIB), Treasury-Bills (T-Bills) o Private Sector: Corporate Bonds, Debentures Call Money, Inter -bank short-term and overnight lending borrowing Loans, Leases, Insurance policies, Certificate of Deposits (CD’s) Badlah (money lending against shares), Road-side money lenders Page 9  © Copyright Virtual University of Pakistan MGT201 (Financial Management) †¢ Real Assets or Physical Asset Markets Following are the active markets of real and physical assets in Pakistan o o o Cotton Exchange, Gold Market, Kapra Market Property (land, house, apartment, warehouse) Computer hardware, Used Cars, Wheat, Sugar, Vegetables, etc. Page 10  © Copyright Virtual University of Pakistan

Introduction to Financial Management free essay sample

MGT201 (Financial Management) MGT201 Lecture No. 01 Introduction to Financial Management Learning objectives: The purpose of this lecture is to provide you with an overview of financial management. After finishing this lecture, you would be able to have a better understanding of the following. Definition of financial management Significance of financial management for non-finance students and professionals Important concepts and areas in financial management The position of financial managers in organizational hierarchy and their respective work domains. Different business legal entities, their advantages and limitations. The external and internal business environments and their relevance to financial management. Different types of financial and real assets markets. What is FM? FM is the management of financial resources – how to best find and use investments and financing opportunities in an ever-changing and increasingly complex environment. Why should CS majors study FM? First of all, financial management is a core life skill; almost every one needs to understand some concepts of finance to manage his/her business personal finances. We will write a custom essay sample on Introduction to Financial Management or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page It is generally and quite rightfully said, â€Å"Money makes the world go round†. Finance is like a life-blood for a company. Even the best of the companies and CEOs go out of the business because of poor financial management policies. Management Information Systems (MIS) and Information Technology (IT) are just a part of the overall corporate strategy which runs on finances, the major resource. So the computer sciences professionals need to have an understanding of the financial concepts to understand and contribute to the overall corporate strategy. Financial Engineering is an upcoming field that requires people with CS, math/science, and finance background. Financial engineering is the application of engineering methods to finance. One important area of study is the design, analysis, and construction of financial contracts to meet the needs of enterprises. This field is experiencing an increased demand for professionals, especially those who are trained in both the underlying mathematics/computer technologies and finance. Page 1  © Copyright Virtual University of Pakistan MGT201 (Financial Management) Definitions Finance: Finance is the science of managing financial resources in an optimal pattern i. e. the best use of available financial sources. Finance consists of three interrelated areas: 1) Money Capital markets, which deals with securities markets financial institutions. 2) Investments, which focuses on the decisions of both individual and institutional investors as they choose assets for their investment portfolios. 3) Financial Management, or business finance which involves the actual management of firms. Major Areas Concepts of Financial Management Following are some of the important areas and concepts of financial management, which would be discussed in detail in the lectures to come. Analysis of Financial Statements: Analysis of financial statement is one of the most common techniques of financial analysis, in which the financial performance and financial health of a company are analyzed based on its past performance. The following financial statements are used in the analysis process. †¢ Profit Loss Statement or Income Statement Income statement reflects the operating efficiency or profitability of a company as a result of its operations along with the net profit available to the shareholders for a given year (usually one accounting period). This statement provides the analyst with some insight into the financial performance of the company. Balance Sheet Balance Sheet is a snap-shot of an organization’s financial health at a particular time. It shows what assets are owned by the business and the sources of acquiring these assets. Statement of Shareholders’ equity Statement of shareholders’ equity provides the share of the owners in the business. Statement of Cash Flows Statement of cash flows explicitly reflects the cash movement (inflows and outflows) during the operations in an accounting period. o o o Taken together, these statements give an accounting picture of the firm’s operations and financial position. Financial statements report what has actually happened to the assets, earnings, and dividends over the years. The analysis of the information contained in these statements help management of the organization to Page 2  © Copyright Virtual University of Pakistan MGT201 (Financial Management) evaluate the performance and activities of the concern; it also helps the investors and creditors to have an idea of the profitability potential and creditworthiness of the business. Investment Decisions Capital Budgeting: Investment decisions are the most critical as they usually involve huge sums of money and these decisions are likely to bring prosperity or doom to a business. A company’s future income depends on how much investment is made, in what type of assets, and how these assets add to the overall value of the company. Capital budgeting is a term strictly related to investment in fixed assets; here, the term capital refers to the fixed assets that are used in production, while budget is a plan which details projected cash inflows and outflows over some future period. The following concepts and techniques are employed while analyzing investment decisions. o Interest rate formulas o Time Value of Money o Discounted Cash Flows o Net Present Value o Internal Rate of Return Risk Return: Investors, individual or institutional, invest their money with the expectations of earning a return on their investment. While investors wish and attempt to earn maximum return, they are constrained by risk. How the risks and returns are related and how do investors make a choice of their portfolios is important for investment decision making. Following concepts and theories would be discussed while discussing the risk-return choices of the investor: o o o o Uncertainty Risk Portfolio Theory Capital Asset Pricing Model Corporate Financing Capital Structure: When a firm plans to expand, it needs capital or funds. Acquisition of funds is considered to be a primary responsibility of a finance department in an organization. There are numerous ways to acquire funds, i. e. , finances can be raised in the form of debt or equity. The proportion of debt and equity constitutes the capital structure of the firm. Financial experts attempt to find a combination of debt and equity that could increase the overall value of the company, i. e. , they try to find the optimal capital structure. The following concepts would be used to understand how an optimal capital structure could be attained. Cost of Capital Leverage Dividend Policy Page 3  © Copyright Virtual University of Pakistan o o o MGT201 (Financial Management) o Debt Instruments Valuation: Asset or company valuation is important not only for financial managers, but also for creditors and investors. It is important to know the value of the company or its assets to make important financing and investment choices. Different valuation techniques and factors that influence the value of a company or its financial instruments would be discussed in this section. o o o o Share Bond Option Corporate Working Capital Inventory Management: Working capital and inventory management pertains to the effective management of current assets. As we will see, an optimal and effective utilization of working capital and inventory increases the operating efficiency of the firm. International Finance Foreign Exchange: With the increasing importance of international trade and global markets, the role of international finance has increased manifold. In a global environment, the finance managers have more choices pertaining to investing and financing than ever before. However, it is important to understand the implications of working in a global environment, since fluctuations in the currency rates can convert a good financing or investment decision into a bad one. This section of the course would discuss the international financial environment and the financial implications of working in a global environment. Organizational Structure (Who does the FM work? ) Chief Executive Officer (CEO) Chief Financial Officer (CFO) Treasurer Controller Cash Investment Accounts Capital Budgeting Audit Capital Structure Inventory Page 4  © Copyright Virtual University of Pakistan MGT201 (Financial Management) Business Legal Entities †¢ Sole Proprietorship : It is an unincorporated business owned by one individual. Going into a business as a sole proprietor is simple – one merely has to begin business operations. Proprietorship consists of 80%of the total number of businesses worldwide. Advantages: i. ii. iii. It is easily inexpensively formed. It is subject to few government regulations. The business pays no corporate income tax; only personal income tax is paid by the proprietor. Limitations: i. ii. It is difficult for a proprietorship to obtain large sums of capital. The proprietor has unlimited personal liability for the business debts, which can result in losses hat exceed the money invested by him in the business. The life of the business organized as proprietorship is limited to the life of the individual who created it. iii. Partnership: A partnership exists whenever two or more persons associate to conduct a noncorporate business. It could be registered or unregistered. Advantages: i. ii. Limitations: i. ii. iii. iv. Unlimited Liability. Limited life of the organization. Difficulty of transferring ownership. Difficulty of raising large amounts of capital. Low cost involved Ease of formation. Corporation: A corporation is a limited company and a separate legal entity registered by the government. It is separate distinct from its owners managers. It Can be Private Limited Page 5  © Copyright Virtual University of Pakistan MGT201 (Financial Management) (Pvt. Ltd. ) or Public Limited (which may be listed on Stock Exchange). The businesses in the form of corporations control 80% of global sales of products and services. Advantages: i- Unlimited life: A corporation can continue even after the death of its original owners. ii- Easy transferability of ownership interest: Ownership interests can be divided into shares of stock, which in turn can be transferred far more easily than can proprietorship partnership interests. ii- Limited Liability: The liability of the shareholders is limited up to the extent of nominal value of shares held by them. Creditors and banks cannot confiscate personal properties of director shareholders in case of its bankruptcy. Limitations: Double Taxation: Corporate earnings may be subject to double taxation – the earnings of the corporation are taxed at corporate level, and then any earnings paid out as dividends are ta xed again as income to the stockholders. ii. Legal Formalities: Setting up a corporation, and filing many official documents, is more complex and time consuming than for a proprietor ship or a partnership Hybrids (Mixed): Hybrid organizations are specialized types of partnerships, which combine the limited liability advantage of a corporation with the tax advantages of a partnership. S-Type Corporation: S- Type corporations are Limited Liability Corporations without double taxation. In a regular corporation, the company itself is taxed on business profits. In addition, the owners pay individual income tax on money that they draw from the corporation as salaries, bonuses, or dividends. In contrast, in an S corporation, all business profits pass through to the owners, who report them on their personal tax returns (as in sole proprietorships, partnerships, and Limited Liability Companies). The S corporation itself does not pay any income tax, although a co-owned S corporation must file an informational tax return like a partnership or Limited Liability Companies – to tell the tax authorities what each shareholders portion of the corporate income is. i. Page 6  © Copyright Virtual University of Pakistan MGT201 (Financial Management) LLP: Limited Liability Partnership (LLP) is also a form of partnership with allows limited liability to the owners and avoids double taxation. These organizations are similar in many ways to the S Corporations; however, LLPs offer more flexibility and benefits to the owners. PC: Personal Corporations ( PC) or Professional Corporations are generally formed by professionals to protect them against litigations. Professionals like doctors, lawyers and accountants prefer to register their business as Professional Corporations. Balance Sheet – An FM Perspective Page 7  © Copyright Virtual University of Pakistan MGT201 (Financial Management) Internal and External Business Environment Internal Business Environment: Internal environment of business normally consists of the following. i. Finance ii. Marketing iii. Human Resources iv. Operations (Production, Manufacturing) v. Technology vi. Other Functions (Logistics, Communications) External Business Environment: The following business environment factors outside an organization have a profound effect on the functions and operations of an organization. . ii. iii. iv. v. vi. Customers Suppliers Competitors Government/Legal Agencies Regulations Macro Economy/Markets: Technological Revolution Page 8  © Copyright Virtual University of Pakistan MGT201 (Financial Management) An analysis which is used in a business is called SWOT Analysis. SWOT is an acronym where S stands for Strengths W stands for Weaknesses O stands for Opportunities T stands for Threat s Strengths and weaknesses are within an organization, i. e. , they pertain to the internal environment of the organization. Opportunities and threats, on the other hand, pertain to the external environment, i. e. , outside the organization. Financial Markets †¢ Capital Markets: These are the markets for the long term debt corporate stocks. Stock Exchange: A stock exchange is a place where the listed shares, Term finance certificates (TFC) and national investment trust units (NIT) are exchanged and traded between buyers and sellers. Long term bonds: Long term government corporate bonds are also traded in capital markets. Money Markets Money market generally is a market where there is buying and selling of short term liquid debt instruments. (Short term means one year or less). Liquid means something which is easily encashable; an instrument that can be easily exchanged for cash. Following financial instruments are traded in money markets. Short term Bonds o Government of Pakistan: Federal Investment Bonds (FIB), Treasury-Bills (T-Bills) o Private Sector: Corporate Bonds, Debentures Call Money, Inter -bank short-term and overnight lending borrowing Loans, Leases, Insurance policies, Certificate of Deposits (CD’s) Badlah (money lending against shares), Road-side money lenders Page 9  © Copyright Virtual University of Pakistan MGT201 (Financial Management) †¢ Real Assets or Physical Asset Markets Following are the active markets of real and physical assets in Pakistan o o o Cotton Exchange, Gold Market, Kapra Market Property (land, house, apartment, warehouse) Computer hardware, Used Cars, Wheat, Sugar, Vegetables, etc. Page 10  © Copyright Virtual University of Pakistan

Introduction to Financial Management free essay sample

MGT201 (Financial Management) MGT201 Lecture No. 01 Introduction to Financial Management Learning objectives: The purpose of this lecture is to provide you with an overview of financial management. After finishing this lecture, you would be able to have a better understanding of the following. Definition of financial management Significance of financial management for non-finance students and professionals Important concepts and areas in financial management The position of financial managers in organizational hierarchy and their respective work domains. Different business legal entities, their advantages and limitations. The external and internal business environments and their relevance to financial management. Different types of financial and real assets markets. What is FM? FM is the management of financial resources – how to best find and use investments and financing opportunities in an ever-changing and increasingly complex environment. Why should CS majors study FM? First of all, financial management is a core life skill; almost every one needs to understand some concepts of finance to manage his/her business personal finances. We will write a custom essay sample on Introduction to Financial Management or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page It is generally and quite rightfully said, â€Å"Money makes the world go round†. Finance is like a life-blood for a company. Even the best of the companies and CEOs go out of the business because of poor financial management policies. Management Information Systems (MIS) and Information Technology (IT) are just a part of the overall corporate strategy which runs on finances, the major resource. So the computer sciences professionals need to have an understanding of the financial concepts to understand and contribute to the overall corporate strategy. Financial Engineering is an upcoming field that requires people with CS, math/science, and finance background. Financial engineering is the application of engineering methods to finance. One important area of study is the design, analysis, and construction of financial contracts to meet the needs of enterprises. This field is experiencing an increased demand for professionals, especially those who are trained in both the underlying mathematics/computer technologies and finance. Page 1  © Copyright Virtual University of Pakistan MGT201 (Financial Management) Definitions Finance: Finance is the science of managing financial resources in an optimal pattern i. e. the best use of available financial sources. Finance consists of three interrelated areas: 1) Money Capital markets, which deals with securities markets financial institutions. 2) Investments, which focuses on the decisions of both individual and institutional investors as they choose assets for their investment portfolios. 3) Financial Management, or business finance which involves the actual management of firms. Major Areas Concepts of Financial Management Following are some of the important areas and concepts of financial management, which would be discussed in detail in the lectures to come. Analysis of Financial Statements: Analysis of financial statement is one of the most common techniques of financial analysis, in which the financial performance and financial health of a company are analyzed based on its past performance. The following financial statements are used in the analysis process. †¢ Profit Loss Statement or Income Statement Income statement reflects the operating efficiency or profitability of a company as a result of its operations along with the net profit available to the shareholders for a given year (usually one accounting period). This statement provides the analyst with some insight into the financial performance of the company. Balance Sheet Balance Sheet is a snap-shot of an organization’s financial health at a particular time. It shows what assets are owned by the business and the sources of acquiring these assets. Statement of Shareholders’ equity Statement of shareholders’ equity provides the share of the owners in the business. Statement of Cash Flows Statement of cash flows explicitly reflects the cash movement (inflows and outflows) during the operations in an accounting period. o o o Taken together, these statements give an accounting picture of the firm’s operations and financial position. Financial statements report what has actually happened to the assets, earnings, and dividends over the years. The analysis of the information contained in these statements help management of the organization to Page 2  © Copyright Virtual University of Pakistan MGT201 (Financial Management) evaluate the performance and activities of the concern; it also helps the investors and creditors to have an idea of the profitability potential and creditworthiness of the business. Investment Decisions Capital Budgeting: Investment decisions are the most critical as they usually involve huge sums of money and these decisions are likely to bring prosperity or doom to a business. A company’s future income depends on how much investment is made, in what type of assets, and how these assets add to the overall value of the company. Capital budgeting is a term strictly related to investment in fixed assets; here, the term capital refers to the fixed assets that are used in production, while budget is a plan which details projected cash inflows and outflows over some future period. The following concepts and techniques are employed while analyzing investment decisions. o Interest rate formulas o Time Value of Money o Discounted Cash Flows o Net Present Value o Internal Rate of Return Risk Return: Investors, individual or institutional, invest their money with the expectations of earning a return on their investment. While investors wish and attempt to earn maximum return, they are constrained by risk. How the risks and returns are related and how do investors make a choice of their portfolios is important for investment decision making. Following concepts and theories would be discussed while discussing the risk-return choices of the investor: o o o o Uncertainty Risk Portfolio Theory Capital Asset Pricing Model Corporate Financing Capital Structure: When a firm plans to expand, it needs capital or funds. Acquisition of funds is considered to be a primary responsibility of a finance department in an organization. There are numerous ways to acquire funds, i. e. , finances can be raised in the form of debt or equity. The proportion of debt and equity constitutes the capital structure of the firm. Financial experts attempt to find a combination of debt and equity that could increase the overall value of the company, i. e. , they try to find the optimal capital structure. The following concepts would be used to understand how an optimal capital structure could be attained. Cost of Capital Leverage Dividend Policy Page 3  © Copyright Virtual University of Pakistan o o o MGT201 (Financial Management) o Debt Instruments Valuation: Asset or company valuation is important not only for financial managers, but also for creditors and investors. It is important to know the value of the company or its assets to make important financing and investment choices. Different valuation techniques and factors that influence the value of a company or its financial instruments would be discussed in this section. o o o o Share Bond Option Corporate Working Capital Inventory Management: Working capital and inventory management pertains to the effective management of current assets. As we will see, an optimal and effective utilization of working capital and inventory increases the operating efficiency of the firm. International Finance Foreign Exchange: With the increasing importance of international trade and global markets, the role of international finance has increased manifold. In a global environment, the finance managers have more choices pertaining to investing and financing than ever before. However, it is important to understand the implications of working in a global environment, since fluctuations in the currency rates can convert a good financing or investment decision into a bad one. This section of the course would discuss the international financial environment and the financial implications of working in a global environment. Organizational Structure (Who does the FM work? ) Chief Executive Officer (CEO) Chief Financial Officer (CFO) Treasurer Controller Cash Investment Accounts Capital Budgeting Audit Capital Structure Inventory Page 4  © Copyright Virtual University of Pakistan MGT201 (Financial Management) Business Legal Entities †¢ Sole Proprietorship : It is an unincorporated business owned by one individual. Going into a business as a sole proprietor is simple – one merely has to begin business operations. Proprietorship consists of 80%of the total number of businesses worldwide. Advantages: i. ii. iii. It is easily inexpensively formed. It is subject to few government regulations. The business pays no corporate income tax; only personal income tax is paid by the proprietor. Limitations: i. ii. It is difficult for a proprietorship to obtain large sums of capital. The proprietor has unlimited personal liability for the business debts, which can result in losses hat exceed the money invested by him in the business. The life of the business organized as proprietorship is limited to the life of the individual who created it. iii. Partnership: A partnership exists whenever two or more persons associate to conduct a noncorporate business. It could be registered or unregistered. Advantages: i. ii. Limitations: i. ii. iii. iv. Unlimited Liability. Limited life of the organization. Difficulty of transferring ownership. Difficulty of raising large amounts of capital. Low cost involved Ease of formation. Corporation: A corporation is a limited company and a separate legal entity registered by the government. It is separate distinct from its owners managers. It Can be Private Limited Page 5  © Copyright Virtual University of Pakistan MGT201 (Financial Management) (Pvt. Ltd. ) or Public Limited (which may be listed on Stock Exchange). The businesses in the form of corporations control 80% of global sales of products and services. Advantages: i- Unlimited life: A corporation can continue even after the death of its original owners. ii- Easy transferability of ownership interest: Ownership interests can be divided into shares of stock, which in turn can be transferred far more easily than can proprietorship partnership interests. ii- Limited Liability: The liability of the shareholders is limited up to the extent of nominal value of shares held by them. Creditors and banks cannot confiscate personal properties of director shareholders in case of its bankruptcy. Limitations: Double Taxation: Corporate earnings may be subject to double taxation – the earnings of the corporation are taxed at corporate level, and then any earnings paid out as dividends are ta xed again as income to the stockholders. ii. Legal Formalities: Setting up a corporation, and filing many official documents, is more complex and time consuming than for a proprietor ship or a partnership Hybrids (Mixed): Hybrid organizations are specialized types of partnerships, which combine the limited liability advantage of a corporation with the tax advantages of a partnership. S-Type Corporation: S- Type corporations are Limited Liability Corporations without double taxation. In a regular corporation, the company itself is taxed on business profits. In addition, the owners pay individual income tax on money that they draw from the corporation as salaries, bonuses, or dividends. In contrast, in an S corporation, all business profits pass through to the owners, who report them on their personal tax returns (as in sole proprietorships, partnerships, and Limited Liability Companies). The S corporation itself does not pay any income tax, although a co-owned S corporation must file an informational tax return like a partnership or Limited Liability Companies – to tell the tax authorities what each shareholders portion of the corporate income is. i. Page 6  © Copyright Virtual University of Pakistan MGT201 (Financial Management) LLP: Limited Liability Partnership (LLP) is also a form of partnership with allows limited liability to the owners and avoids double taxation. These organizations are similar in many ways to the S Corporations; however, LLPs offer more flexibility and benefits to the owners. PC: Personal Corporations ( PC) or Professional Corporations are generally formed by professionals to protect them against litigations. Professionals like doctors, lawyers and accountants prefer to register their business as Professional Corporations. Balance Sheet – An FM Perspective Page 7  © Copyright Virtual University of Pakistan MGT201 (Financial Management) Internal and External Business Environment Internal Business Environment: Internal environment of business normally consists of the following. i. Finance ii. Marketing iii. Human Resources iv. Operations (Production, Manufacturing) v. Technology vi. Other Functions (Logistics, Communications) External Business Environment: The following business environment factors outside an organization have a profound effect on the functions and operations of an organization. . ii. iii. iv. v. vi. Customers Suppliers Competitors Government/Legal Agencies Regulations Macro Economy/Markets: Technological Revolution Page 8  © Copyright Virtual University of Pakistan MGT201 (Financial Management) An analysis which is used in a business is called SWOT Analysis. SWOT is an acronym where S stands for Strengths W stands for Weaknesses O stands for Opportunities T stands for Threat s Strengths and weaknesses are within an organization, i. e. , they pertain to the internal environment of the organization. Opportunities and threats, on the other hand, pertain to the external environment, i. e. , outside the organization. Financial Markets †¢ Capital Markets: These are the markets for the long term debt corporate stocks. Stock Exchange: A stock exchange is a place where the listed shares, Term finance certificates (TFC) and national investment trust units (NIT) are exchanged and traded between buyers and sellers. Long term bonds: Long term government corporate bonds are also traded in capital markets. Money Markets Money market generally is a market where there is buying and selling of short term liquid debt instruments. (Short term means one year or less). Liquid means something which is easily encashable; an instrument that can be easily exchanged for cash. Following financial instruments are traded in money markets. Short term Bonds o Government of Pakistan: Federal Investment Bonds (FIB), Treasury-Bills (T-Bills) o Private Sector: Corporate Bonds, Debentures Call Money, Inter -bank short-term and overnight lending borrowing Loans, Leases, Insurance policies, Certificate of Deposits (CD’s) Badlah (money lending against shares), Road-side money lenders Page 9  © Copyright Virtual University of Pakistan MGT201 (Financial Management) †¢ Real Assets or Physical Asset Markets Following are the active markets of real and physical assets in Pakistan o o o Cotton Exchange, Gold Market, Kapra Market Property (land, house, apartment, warehouse) Computer hardware, Used Cars, Wheat, Sugar, Vegetables, etc. Page 10  © Copyright Virtual University of Pakistan

Free Essays on Schizophrenia

Dementia Praecox, the early term for schizophrenia was presented by Emil Kraepelin in 1898. Dementia Praecox included – dementia paranoids, catatonia and hebephrenia. Whilst these different entities are symptomatically very diverse, Kraepelin believed they shared a common core. Kraepelin noted several major symptoms in his patients, these included hallucinations, delusions, negativism, attentional difficulties, stereotyped behaviour and emotional dysfunction. Kraepelin focused on describing schizophrenia and made no attempt to categorise and explain what he saw. Eugen Bleuler however tried to define the core of the disorder. Bleuler disagreed with Kraepelin on two points. Bleuler believed that the disorder didn’t necessary have an early onset and that the disorder didn’t necessarily lead to total dementia. Since he believed that the disorder didn’t lead to total dementia the term dementia praecox was no longer valid, so in 1908 Bleuler suggested a new term for the condition Schizophrenia. Bleuler had a great influence over the American concept of Schizophrenia. Whilst the European view of Schizophrenia remained relatively narrow. The American view of schizophrenia broadened significantly during the 20th century, with 80% of patients in the New York State Psychiatric Institute being diagnosed with Schizophrenia in 1952. Adolf Myer argued that diagnostic categories where often to stringent and believed that a more flexible approach to defining Schizophrenia was necessary. Kansnin then found that some patients showed signs schizophrenia combined with symptoms from other disorders. The concept of schizophrenia was also broadened by Hoch who believed that schizophrenia often disguises itself has other disorders. As a result a lot of people who would normally have been diagnosed with personality disorders or neurosis, where diagnosed has having schizophrenia. After the publication of DSM III the American definition moved away ... Free Essays on Schizophrenia Free Essays on Schizophrenia During the 1950s, mentally disordered people who were harmful to society and themselves could be treated with medications and were able to return safely to their communities. Unfortunately in the 1980s, the cost of health care increased more than any other cost in our national economy. Strategic planning has been made to reduce costs, as a result, â€Å"The political decision made to deinstitutionalize chronic mental patients started with the appearance of phenothiazine medications. Dramatically reducing the instability influenced by psychosis, these medications were of great significance to many individuals with serious mental disorders. At both the state and federal levels, legislators looked at the high cost of long-term psychiatric hospitalization. Social scientists guaranteed them that community-based care would be in the best interests of all concerned: the mentally ill and the general, tax-paying public.† (Barry 13) It was believed that a social breakdown syndrome would develop in chronically mentally ill persons who were institutionalized. The characteristics of this syndrome were submission to authority, withdrawal, lack of initiative, and excessive dependence on the institution. Even though deinstitutionalization seemed like the logic thing to do, the actual execution of the concept has been greatly undermined by the lack of good community alternatives. The largest majority of individuals using community mental health treatment services are the homeless. Nearly half of the homeless are chronically mental ill. These individuals are usually separated from their families and are all alone on the dangerous street. These homeless schizophrenics stay away from social structures such as community health treatment centers. Since they start a new life of independence they often stop taking their medications, become psychotic and out of place, and begin to live on the street. Since the schizophrenics are deinstitutionaliz... Free Essays on Schizophrenia The pathophysiological theories of auditory hallucinations have virtually been unknown until recently. These theories of auditory hallucinations â€Å"suggest that the production of auditory hallucinations in schizophrenia is associated with increased activity in a network of cortical areas specialized for language† (McGuire, PK, GMS Shah, and RM Murray; Lancet, v. 342, iss. 8873, pg 704; 1993). McGuire, Shah, and Murray conducted a famous study in which they studied 12 schizophrenic patients at various hospitals. Using single photon emission topography (SPET) they measured regional cerebral blood flow with â€Å"the aim of identifying brain areas that are especially active during auditory hallucinations† (McGuire, Shah, and Murray, pg 703). The results of their study were very interesting and made great leaps in the study of schizophrenia. They discovered that an area of the brain known as Broca’s area, which is the part of the brain known to be involved in speech production, expe! rienced an increase of blood flow during auditory hallucinations. This is interesting because â€Å"since hallucinations usually involve understanding the ‘speech’ of others, you might expect more activity in Wernicke’s area, which involves language comprehension† (Barlow, David and Mark Durand; Abnormal Psychology: Brooks/Cole Publishing Company; Pacific Grove, 1999). This means that people who are hallucinating are probably not hearing the voices of others, but are listening to their own thoughts or their won voices and cannot recognize the difference.... Free Essays on Schizophrenia Schizophrenia 3 Schizophrenia Schizophrenia is a very serious disease that knows no shape, size, gender, or color. Schizophrenia is characterized by profound disruption in cognition and emotion, affecting the most fundamental human attributes: language, thought, perception, affect, and sense of self (Spearing 2004). Having no single definitive symptom makes it hard to diagnose and even harder to live with. Schizophrenia can be draining on both the person with the illness and their families. The mental, physical, and financial strain it imposes can cripple even the strongest of people. Though it is not exploited as much as AIDS and Cancer, schizophrenia is out there, and it is a disease that everyone should be aware of and have a healthy fear of. Schizophrenia is a mental disorder that is basically a loss of contact with reality. When a person’s thinking, feeling, and behavior is so far from normal and interferes with their ability to function in everyday life, then he or she has a mental illness called schizophrenia (Papolos 1997). Schizophrenia is typically characterized as a separation between the thought process and emotions (Myers 2003). However, trying to define schizophrenia is like trying to hit a moving target. The disorder can distort reality and cause delusions as well as hallucinations. Schizophrenia is a brain disease, meaning that there should be a way to cure it, however, that cause has not been found yet (Papolos 1997). The tough thing about schizophrenia is the exact cause of it is still unknown by scientist. The only thing they are certain of is that schizophrenia has more than one cause. Scientist believe that like heart disease schizophrenia may result from an interplay of genetic and environmental factors (Hattfield 1998). Though they are yet to understand all of the factors necessary to produce schizophrenia, all the tools of modern biomedical research are being used to search for genes... Free Essays on Schizophrenia Schizophrenia is one of the most serious and complex disorders of the mind. The disease is an abnormal decay of the person’s mental functions. Schizophrenia is an often-misunderstood disease; it is usually confused with Multiple Personality Disorder. According to Webster’s Dictionary Schizophrenia is defined as any of a group of psychotic disorders usually characterized by withdrawal from reality, illogical patterns of thinking, delusions, and hallucinations, and accompanied in varying degrees by other emotional, behavioral, or intellectual disturbances. Schizophrenia is associated with dopamine imbalances in the brain and defects of the frontal lobe and is caused by genetic, other biological, and psychosocial factors. All these factors force the person to require medical attention constantly as they cannot face the daily tasks of their lives. Schizophrenics who also suffer from inappropriate moods, hallucinations and delusions, make them highly unpredictable to care for or treat effectively. Schizophrenia is a mental disorder that severely impacts how millions of Americans think feel and act. It is a disorder that makes it difficult for a person to tell the difference between real and imagined experiences, to think logically, to express normal emotional responses or to behave normally in social situations, also the disease has many types of medications to help its patients. Schizophrenia affects men and women equally, and either way there is always a heavy burden on the family. E. Fuller Torrey states, â€Å"Work on schizophrenia show that exactly one out every hundred people in the United will be diagnosed with schizophrenia†(3). Schizophrenia can be draining on both the person with schizophrenia and their families. People with schizophrenia often have difficulty functioning in society at work and in school. The families have a heavy burden because they have to help out financially and make sure that medication is taken as ... Free Essays on Schizophrenia Schizophrenia Schizophrenia, severe mental illness characterized by a variety of symptoms, including loss of contact with reality, bizarre behavior, disorganized thinking and speech, decreased emotional expressiveness, and social withdrawal. Usually only some of these symptoms occur in any one person. The term schizophrenia comes from Greek words meaning â€Å"split mind.† However, contrary to common belief, schizophrenia does not refer to a person with a split personality or multiple personality. To observers, schizophrenia may seem like madness or insanity. Perhaps more than any other mental illness, schizophrenia has a debilitating effect on the lives of the people who suffer from it. A person with schizophrenia may have difficulty telling the difference between real and unreal experiences, logical and illogical thoughts, or appropriate and inappropriate behavior. Schizophrenia seriously impairs a person’s ability to work, go to school, enjoy relationships with others, or take ca re of oneself. In addition, people with schizophrenia frequently require hospitalization because they pose a danger to themselves. About 10 percent of people with schizophrenia commit suicide, and many others attempt suicide. Once people develop schizophrenia, they usually suffer from the illness for the rest of their lives. Although there is no cure, treatment can help many people with schizophrenia lead productive lives. Schizophrenia also carries an enormous cost to society. People with schizophrenia occupy about one-third of all beds in psychiatric hospitals in the United States. In addition, people with schizophrenia account for at least 10 percent of the homeless population in the United States (see Homelessness). The National Institute of Mental Health has estimated that schizophrenia costs the United States tens of billions of dollars each year in direct treatment, social services, and lost productivity. Approximately 1 percent of people devel... Free Essays on Schizophrenia Dementia Praecox, the early term for schizophrenia was presented by Emil Kraepelin in 1898. Dementia Praecox included – dementia paranoids, catatonia and hebephrenia. Whilst these different entities are symptomatically very diverse, Kraepelin believed they shared a common core. Kraepelin noted several major symptoms in his patients, these included hallucinations, delusions, negativism, attentional difficulties, stereotyped behaviour and emotional dysfunction. Kraepelin focused on describing schizophrenia and made no attempt to categorise and explain what he saw. Eugen Bleuler however tried to define the core of the disorder. Bleuler disagreed with Kraepelin on two points. Bleuler believed that the disorder didn’t necessary have an early onset and that the disorder didn’t necessarily lead to total dementia. Since he believed that the disorder didn’t lead to total dementia the term dementia praecox was no longer valid, so in 1908 Bleuler suggested a new term for the condition Schizophrenia. Bleuler had a great influence over the American concept of Schizophrenia. Whilst the European view of Schizophrenia remained relatively narrow. The American view of schizophrenia broadened significantly during the 20th century, with 80% of patients in the New York State Psychiatric Institute being diagnosed with Schizophrenia in 1952. Adolf Myer argued that diagnostic categories where often to stringent and believed that a more flexible approach to defining Schizophrenia was necessary. Kansnin then found that some patients showed signs schizophrenia combined with symptoms from other disorders. The concept of schizophrenia was also broadened by Hoch who believed that schizophrenia often disguises itself has other disorders. As a result a lot of people who would normally have been diagnosed with personality disorders or neurosis, where diagnosed has having schizophrenia. After the publication of DSM III the American definition moved away ... Free Essays on Schizophrenia A lot of the research and information I found on schizophrenia, are heavy on the side of genetics. However; there is much evidence of the environment having a large impact as well. It is hard to say what kind of effect you childhood experiences have on schizophrenic people because the disease isn't usually diagnosed until the ages of 18 and on. There is some evidence that I will discuss later on that have to do with environmental factors during pregnancy that have some correlation to schizophrenia. Schizophrenia is the most common psychoses in the United States affecting around one percent of the United States population. It is characterized by a deep withdrawal from interpersonal relationships and a retreat into a world of fantasy. This plunge from reality to fantasy results in a loss of contact from reality that can vary from mild to severe. They is more than one acceptable definition for psychosis. The psychoses are different from other groups of psychiatric disorders in their degree of severity, withdrawal, alteration in affect, impairment of intellect, and regression. It is possible that there may be a pre-schizophrenic phase a year or two before the disorder is diagnosed. This phase may include neurotic symptoms such as acute or chronic anxiety, phobias, obsessions, and compulsions or may reveal dissociative features. As anxiety mounts, indications of a thought disorder may appear. An adolescent may complain of difficulty with concentration and with the ability to complete school work or job-related work. Over time there is severe deterioration of work along with the deterioration of the ability to cope with the environment. Complains such as mind wandering and needing to devote more time to maintaining one’s thoughts are heard. Finally, the ability to keep out unwanted intrusions into one’s thoughts becomes impossible. As a result, the person finds that his or her mind becomes so confused and thoughts so distracted, t... Free Essays on Schizophrenia Schizophrenia The most puzzling of all mental abnormalities is the psychosis, known as Schizophrenia. Evidence indicates strongly that schizophrenia is a severe disturbance in the brain’s functioning. It’s caused by many factors- including changes in the chemistry of the brain, changes in the structure of the brain and genetic factors. â€Å"Schizophrenia† is a discordant and cruel term, just like the disease. (E. Fuller Torrey,M.D.) In 1843, Dorothea Dix appeared at the Massachusetts court to state that the state of insane persons confined within this common wealth in cages, closets, cellars, stalls, pens, chained, naked, beaten with rods, and lashed into obedience. In 1985 witnesses testified for the senate subcommittee on the Handicapped regarding staff abuse of people resided in mental Hospitals, including â€Å"kicking or otherwise striking patients, sexual advances and rape, verbal threats of injury and other forms of intimidation.† (E. Fuller Torrey, M.D.) In 1982 The New York Times reported on nine mental patients, placed with a fee in a foster home operator, who were kept in a shed with no toilet or running water and â€Å"two vicious dogs chained outside the small room† to make sure they did not run away. In the 1980’s newspapers regularly reported seriously mentally ill p ersons freezing on the streets in wi! nter. It became common, when a homeless man froze to death a few blocks from the White House, the Washington Post â€Å"routinely reported his death as a minor part of a weather story.† The front page of The New York Times featured a picture of a city worker â€Å"trying to give lunch to a man who lives in a box in Battery Park.† The picture showed a make shift shelter made of pieces of cardboard on a park bench. In Massachusetts, â€Å"two small defenseless street people† were beaten to death. (E. Fuller Torrey, M.D.)The local newspaper editorized that as it was like having â€Å"rabbits forced to live in the c... Free Essays on Schizophrenia Schizophrenia Schizophrenia is a psychotic disorder type of mental illness that affects an individual’s personality and their ability to cope with everyday life. Even though schizophrenia can develop in older people, it generally develops in early adulthood. It seems that more men are affected between the ages of 16 to 20 years but more women are affected between the ages of 25 to 30. Schizophrenia affects approximately 1 percent of all people, all over the world. Types of schizophrenia Catatonic schizophrenia – shows physical symptoms like immobility, having strange posture and frenzied movement. Paranoid schizophrenia – having major delusions and hallucinations. Disorganised (hebephrenic) schizophrenia – having abnormal emotional reactions and disrupted speech and thinking patterns. Undifferentiated schizophrenia – having a combination of symptoms from all groups. Major Symptoms Delusions – having a false belief of guilt, persecution or being controlled. People that suffer delusions may feel as though there are plots or conspiracies against them by the government. They will become withdrawn. Some people believe that they have super powers. Hallucinations – usually this is referring to hearing voices in their head. Some uncommon hallucinations are hearing, seeing, smelling, tasting and touching things that only they can perceive. Thought disorder – people showing thought disorder will be hard to understand as it affects the way the ill person talks. Their speech will be mixed up and they will change subject quickly and with no apparent reason. Some people will believe that their mind is being controlled or that thoughts are being implanted inside, or being removed from, their head. Other symptoms include: Loss of motivation – where the ability to accomplish simple everyday things, like washing and cooking, are gone. Dulled expressions of emotions – losing the ability to show emotion, this is ... Free Essays on Schizophrenia The Causes and Symptoms Schizophrenia Schizophrenia : A life destroyer. Schizophrenia is one of the most common serious psychiatric illnesses in the United States. â€Å"In fact schizophrenia hits one person in every hundred. In the United States alone there are a minimum of two million schizophrenics† (Walsh 52). The causes for schizophrenia are not fully known and are still under research. The most common symptoms include hallucinations, delusions, disorganized speech patterns, disorganized behavior and a decrease in emotional expression. Dealing with schizophrenia is a difficult task and if left untreated, could be fatal to ones health. The effects of schizophrenia do not stop at the lives of the patients, they also make their way to family and friends. Many of whom experience feelings of sorrow, guilt and anger. Leaving schizophrenia untreated is hazardous and may be fatal to both the victim and the people around them. There are various medications and treatments that a schizophrenic can endure in order to he lp them maintain a normal lifestyle. Schizophrenia is a word derived from the Greek Language. Schizo, meaning split and phrenia, meaning mind (Wascow 2). This definition is often why schizophrenia is misunderstood to be a mental disorder of split personalities. Schizophrenia has absolutely nothing to do with splitting ones personality into multiple parts, in fact most schizophrenics are often too disordered to carry out double lives. The actual message Dardis 2 Eugen Bleuler, the inventor of the word â€Å"schizophrenia† was trying to convey is the splitting of reality and perception.† Schizophrenia is a serious mental disorder that lasts for at least six months, and includes at least two of the following symptoms, hallucinations, delusions, disorganized speech, disorganized behavior and decreased emotional ... Free Essays on Schizophrenia Schizophrenia Schizophrenia is a severe mental illness described by a variety of symptoms, including â€Å"loss of contact with reality, bizarre behavior, disorganized thinking and speech, decreased emotional expressiveness, and social withdrawal.† Usually only some of these symptoms occur in any one person.† More than any other mental illness, schizophrenia has a devastating effect on the lives of the people who suffer from it. A person with schizophrenia may have difficulty telling the difference between real and unreal experiences, logical and illogical thoughts, or appropriate and inappropriate behavior. Schizophrenia seriously impairs a person’s ability to work, go to school, enjoy relationships with others, or take care of oneself. In addition, people with schizophrenia frequently require hospitalization because they pose a danger to themselves. Once people develop schizophrenia, they usually suffer from the illness for the rest of their lives. Although there is no cure, treatment can help many people with schizophrenia lead productive lives. Schizophrenia usually develops in late adolescence or early adulthood, between the ages of 15 and 30. Much less commonly, schizophrenia develops later in life. The illness may begin abruptly, but it usually develops slowly over months or years. Mental health professionals diagnose schizophrenia based on an interview with the patient in which they determine whether the person has experienced specific symptoms of the illness. Symptoms and functioning in people with schizophrenia tend to vary over time, sometimes people get worse and some start feeling better. For many patients the symptoms gradually become less severe as they grow older. About 25 percent of people with schizophrenia become symptom-free later in their lives. A variety of symptoms describe schizophrenia. The most well known include â€Å"symptoms of psychosis, such as delusions and hallucinations, as well as... Free Essays on Schizophrenia Schizophrenia is a brain disorder that affects one’s ability to think clearly, manage emotions, make decisions, and relate to others. Schizophrenia typically starts during the teenage years or early adulthood and continues throughout life. The disease can occur earlier in childhood as well but it rarely occurs. Schizophrenia is often misdiagnosed. As a result, many people suffer for years before receiving appropriate treatment. People with schizophrenia often suffer terrifying symptoms such as hearing internal voices not heard by others, or believing that other people are reading their minds, controlling their thoughts, or plotting to harm them. Symptoms of schizophrenia include hallucinating, delusions, disordered thinking, unusual speech or behavior, and social withdrawal impair the ability to interact with others. These symptoms may leave them fearful and withdrawn. Their speech and behavior can be so disorganized that they may be incomprehensible or frightening to others. Available treatments can relieve many symptoms, but most people with schizophrenia continue to suffer some symptoms throughout their lives. It has been estimated that no more than one in five individuals recovers completely. Schizophrenia is found all over the world. The severity of the symptoms and long-lasting, chronic pattern of schizophrenia often cause a high degree of disability. Medications and other treatments for schizophrenia, when used regularly and as prescribed, can help reduce and control the distressing symptoms of the illness. However, some people are not greatly helped by available treatments or may prematurely discontinue treatment because of unpleasant side effects or other reasons. Even when treatment is effective, consequences of the illness persist. They may lose out on opportunities, the residual symptoms, and medication side effects can be very troubling. The first signs of schizophrenia often appear as confusing, or even sh... Free Essays on Schizophrenia Types of Schizophrenia Schizophrenia is a group of disorders that are characterized by the loss of contact with reality, and the marked disturbances of thought and perception as well as bizarre behavior. This mental disease is among the most debilitating and complex mental disease. Roughly one percent of the world is afflicted with this particular illness. Schizophrenia was first discovered in 1896 by Emil Kraeplin, but since then there has been much research and further findings. Since then there has been several different classifications of schizophrenia that have been made. The purpose of this paper is to briefly inform you on these different subtypes of schizophrenia. The first subtype of schizophrenia that I will be discussing is the paranoid subtype. The defining feature of the paranoid type is the presence of auditory hallucinations or delusional thoughts containing persecution or conspiracy. However, people with this type may be more functional with their ability to work and interact in relationships rather than people who are diagnosed with other types of schizophrenia. The reasons are not clear, but this may be because people suffering from this type often times do not do not portray symptoms of the paranoid type until later in his or hers life, which at this point they would already have achieved a higher level of functioning before the onset of their disease. People who are diagnosed with this type of schizophrenia may appear to have lived normal lives by successful management of their illness. People who are paranoid schizophrenic may not appear to be odd or dysfunctional and may not b ready to discuss their symptoms to this illness. Ord inarily, the hallucinations and delusions center around some characteristic theme, and this theme often remains fairly consistent over time. Person's temperaments and general behaviors often times relate to the content of the disturbance of thought. An example would be people w... Free Essays on Schizophrenia Schizophrenia is a chronic, severe, and disabling brain disease. Approximately 1 percent of the population develops schizophrenia during their lifetime – more than 2 million Americans suffer from the illness in a given year. Although schizophrenia affects men and women with equal frequency, the disorder often appears earlier in men, usually in the late teens or early twenties, than in women, who are generally affected in the twenties to early thirties. People with schizophrenia often suffer terrifying symptoms such as hearing internal voices not heard by others, or believing that other people are reading their minds, controlling their thoughts, or plotting to harm them. These symptoms may leave them fearful and withdrawn. Their speech and behavior can be so disorganized that they may be incomprehensible or frightening to others. Available treatments can relieve many symptoms, but most people with schizophrenia continue to suffer some symptoms throughout their lives; it has bee n estimated that no more than one in five individuals recovers completely. This is a time of hope for people with schizophrenia and their families. Research is gradually leading to new and safer medications and unraveling the complex causes of the disease. Scientists are using many approaches from the study of molecular genetics to the study of populations to learn about schizophrenia. Methods of imaging the brain’s structure and function hold the promise of new insights into the disorder. Schizophrenia is found all over the world. The severity of the symptoms and long-lasting, chronic pattern of schizophrenia often cause a high degree of disability. Medications and other treatments for schizophrenia, when used regularly and as prescribed, can help reduce and control the distressing symptoms of the illness. However, some people are not greatly helped by available treatments or may prematurely discontinue treatment because of unpleasant side effects or other... Free Essays on Schizophrenia Schizophrenia is a serious, chronic mental disorder characterized by loss of contact with reality and disturbances of thought, mood, and perception. Schizophrenia is the most common and the most potentially sever and disabling of the psychosis, a term encompassing several severe mental disorders that result in the loss of contact with reality along with major personality derangements. Schizophrenia patients experience delusions, hallucinations and often lose thought process. Schizophrenia affects an estimated one percent of the population in every country of the world. Victims share a range of symptoms that can be devastating to themselves as well as to families and friends. They may have trouble dealing with the most minor everyday stresses and insignificant changes in their surroundings. They may avoid social contact, ignore personal hygiene and behave oddly (Kass, 194). Many people outside the mental health profession believe that schizophrenia refers to a â€Å"split personality †. The word â€Å"schizophrenia† comes from the Greek schizo, meaning split and phrenia refers to the diaphragm once thought to be the location of a person’s mind and soul. When the word â€Å"schizophrenia† was established by European psychiatrists, they meant to describe a shattering, or breakdown, of basic psychological functions. Eugene Bleuler is one of the most influential psychiatrists of his time. He is best known today for his introduction of the term â€Å"schizophrenia† to describe the disorder previously known as dementia praecox and for his studies of schizophrenics. The illness can best be described as a collection of particular symptoms that usually fall into four basic categories: formal thought disorder, perception disorder, feeling/emotional disturbance, and behavior disorders (Young, 23). People with schizophrenia describe strange of unrealistic thoughts. Their speech is sometimes hard to follow because of disordered thinking. Phr ases seem di... Free Essays on Schizophrenia Schizophrenia has been found to be the most common of the various psychoses. The disorder was named by a Swiss psychiatrist, Eugene Bleuller. The word â€Å"schizophrenia† is used to describe Bleuller’s view that a splitting of psychic functions is a prominent feature of the disorder. A schizophrenic’s ideas and feelings are isolated from one another: one may speak randomly, or express frightening or sad ideas in a happy manner. Schizophrenics do not have a â€Å"split personality†, where different personalities show on different occasions. There are many symptoms of schizophrenia including delusions, hallucinations, thought disorders, loss of boundaries between self and nonself, blunted or inappropriate emotional expression, socially inappropriate behavior, loss of social interests, and deterioration in areas of function such as work and self-care. Delusions can make a patient believe that he or she is being persecuted by those around them, that a machine controls their brain, or that they are someone else. Hallucination, although they are mostly auditory, can also be visual or olfactory. The content is often hypochondriacal or religious. Some hallucinatory voices speak of matters related to the patient’s emotional problems or delusional concerns. Others transmit apparently irrelevant messages. Thought disorders may include a general lowering of intellectual efficiency, a free- associative rambling form one topic to another, a loss of the distinction between figurative and literal usage of words, reduced ability to think abstractly, invention of new words, and idiosyncratic misuse of common words. It appears that schizophrenia is a heterogeneous disorder. There are three variations of schizophrenia. Paranoid Schizophrenia is characterized by delusions. Catatonic schizophrenics may be silent and immobile for weeks or months, and then break out into a frenzy of agitation. Hebephrenic schizophrenics suffer from intel...