Chapter 1: Construction Financial Management
Learning Objectives
At the completion of this chapter the student should be able to:
• Explain why financial management is so important to a construction company.
• Explain why financial management is different for construction companies than for most
other industries.
• Understand that all managerial employees from the owner to the crew foreperson play a
role in financial management of a construction company.
Instructional Hints
• Compare a construction company to a manufacturing plant. Emphasize the differences
between a construction company and a manufacturing plant, particularly: construction
Activities
• Invite a financial manager (for example, an accountant or general manager) from a
construction company to your class to discuss their role as a financial manager.
Instruction Resources
• The figures from this chapter in electronic format and PowerPoint slides can be found at
the instructor’s website.
• Data on construction failures can be obtained from the Surety Information Office
Solutions to the Textbook Problems
2. Anyone who controls financial resources (cash, materials, labor, and equipment) including:
3. The way construction companies do business is very different than most companies. The
4. Accounting for financial resources include: 1) tracking project and general overhead costs, 2)
5. Managing costs and profits include: 1) controlling project costs, 2) monitoring and projecting
6. Managing cash flows include: 1) matching the use of subcontractor and in-house labor to
7. Construction managers must select where to invest the company’s resources and select the