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Financial mgt
Financial mgt
Financial mgt
Financial mgt
Financial mgt
Financial mgt
Financial mgt
Financial mgt
Financial mgt
Financial mgt
Financial mgt
Financial mgt
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Financial mgt

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  • 1. Financial Management <ul><li>PODSCORB of Finance </li></ul><ul><ul><ul><li>Planning </li></ul></ul></ul><ul><ul><ul><li>Organizing </li></ul></ul></ul><ul><ul><ul><li>Directing </li></ul></ul></ul><ul><ul><ul><li>Staffing </li></ul></ul></ul><ul><ul><ul><li>Controlling </li></ul></ul></ul><ul><ul><ul><li>Recruiting </li></ul></ul></ul><ul><ul><ul><li>Budgeting </li></ul></ul></ul>
  • 2. Meaning of Financial Management <ul><li>Financial management is concerned with efficient use of </li></ul><ul><li>an important economic resources namely capital funds. </li></ul>
  • 3. Scope of Financial Management <ul><li>Scope of Financial Management considers two approaches </li></ul>
  • 4. Traditional Approach <ul><li>It relates to the initial stages of its evolution </li></ul><ul><li>It is confined only to procurement of funds </li></ul><ul><li>The traditionalist considers </li></ul><ul><ul><ul><li>Financial Institutions – Place where they get the finance </li></ul></ul></ul><ul><ul><ul><li>Financial Instruments – Medium of Finance </li></ul></ul></ul>
  • 5. CRITICISM <ul><li>It ignores internal decision making </li></ul><ul><li>Ignored issue of working capital finance </li></ul><ul><li>Ignored allocation of funds </li></ul>
  • 6. MODERN APPROACH <ul><li>It views </li></ul><ul><ul><li>Financial Planning </li></ul></ul><ul><ul><li>Raising of funds </li></ul></ul><ul><ul><li>Utilization of funds and </li></ul></ul><ul><ul><li>Financial control </li></ul></ul><ul><ul><li>It considers </li></ul></ul><ul><ul><li>Investment decision </li></ul></ul><ul><ul><li>Financial Decision </li></ul></ul><ul><ul><li>Dividend Decision </li></ul></ul>
  • 7. INVESTMENT DECISION <ul><li>Determination of total assets to be held in the firm </li></ul><ul><li>Composition of the assets and </li></ul><ul><li>Business risk complexions </li></ul>
  • 8. INVESTMENT DECISION <ul><li>Classified into two broad groups </li></ul>
  • 9. LONG TERM INVESTMENT DECISION <ul><li>Also called as Capital Budgeting </li></ul><ul><li>Process of making investment decisions in capital Expenditure </li></ul><ul><li>The benefits of Expenditure which are expected to received over a long period of time exceeding one year. </li></ul><ul><li>Assess the profitability of the project before committing the funds. </li></ul><ul><li>Proposals should be evaluated in terms of profitability, cost involved and the risks associated with the project. </li></ul>
  • 10. SHORT TERM INVESTMENT DECISION <ul><li>Also called as Working Capital Management </li></ul><ul><li>Fund necessary to cover the cost of operating the firm </li></ul><ul><li>Working capital policy which ensures higher profitability, proper liquidity and sound structural health of the organisation. </li></ul>
  • 11. FINANCIAL DECISION <ul><li>Decide the best means of financing the commitments </li></ul><ul><li>Concerned how best to finance new assets and best overall financial mix of the firm </li></ul>
  • 12. DIVIDEND DECISION <ul><li>How much paid to the shareholders as a dividend </li></ul>

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