Financial management ppt

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  • 1. FINANCIAL MANAGEMENT
    LONG TERM SOURCES OF FINANCE WITH EMPHASIS ON
    OWNED FUNDS.
    • EQUITY SHARE CAPITAL
    • 2. PREFERENCE SHARE CAPITAL
    • 3. RETAINED EARNING
  • SOURCES OF FINANCE
    SHORT TERM
    LONG TERM
    PURCHASE OF FIXED ASSETS
    FUNDING EXPANSIONS
    DIVERSIFICATIONS
    TRADE CREDITS
    CREDIT FROM SUPPLIERS
    ADVANCE FROM DEALERS
  • 4. LONG TERM FINANCE
    BORROWED FUNDS
    OWNED FUNDS
    SHARES
    RETAINED EARNING
  • 5. SHARES
    • A SHARE HAS BEEN DEFINED BY THE INDIAN COMPANIES
    ACT, 1956
    • SHARE MEANS SHARE IN THE SHARE CAPITAL OF THE
    COMPANY & INCLUDES STOCK EXCEPT WHERE A
    DISTINCTION BETWEEN STOCK & SHARE IS EXPRESSED
    OR IMPLIED.
    • THE LIABILITY OF THE SHAREHOLDER IS LIMITED TO THE
    EXTENT OF THE FACE VALUE OF THE SHARES.
  • 6. A SHAREHOLDER- MEMBER OF THE COMPANY
    NUMBERS OF MEMBERS (MEMBERSHIP ) IN CASE OF A COMPANY
    PUBLIC COMPANY
    PRIVATE COMPANY
    MINIMUM
    7
    2
    MAXIMUM
    50
    UNLIMITED
  • 7. AUTHORISED CAPITAL
    ISSUED CAPITAL
    UNISSUED CAPITAL
    SUBSCRIBED CAPITAL
    UNSUBSCRIBED CAPITAL
    CALLED UP CAPITAL
    UNCALLED CAPITAL
    RESERVE CAPITAL
    CALLS IN ARREARS (UNPAID CAPITAL)
    PAID UP CAPITAL
  • 8. SHARES
    EQUITY SHARES
    PREFERENCE SHARES
  • 9. EQUITY SHARES
    • RISK BEARING CAPITAL
    • 10. NO FIXED RATE OF DIVIDEND
    • 11. RIGHT TO VOTE
    • 12. OWNERS OF THE COMPANY
  • RIGHTS OF EQUITY SHAREHOLDERS
    • THE RIGHT TO RESIDUAL INCOME
    • 13. RIGHT OF CONTROL
    • 14. PRE-EMPTIVE RIGHT
    • 15. RESIDUAL CLAIMANTS OVER ASSETS
  • ADVANTAGES OF EQUITY SHARES
    TO THE ISSUING COMPANY-
    • PERMANENT SOURCE OF CAPITAL
    • 16. NO FIX DIVIDEND
    • 17. CREDITWORTHYNESS OF THE COMPANY
  • DISADVANTAGES OF THE EQUITY SHARES
    TO THE ISSUING COMPANY-
    • NOT A TAX-DEDUCTIBLE EXPENSE
    • 18. FLOATATION COST IS HIGHER
    • 19. OVER CAPITALISATION
    • 20. DILUTION OF CONTROL
  • ADVANTAGES OF EQUITY SHARES
    TO THE SHAREHOLERS-
    • HIGHLY PROFITABLE SHRES
    • 21. OWNERS OF THE COMPANY
    • 22. LIMITED LIABILITY
  • DISADVANTAGES OF EQUITY SHARES
    TO THE SHAREHOLERS-
    • RISK CAPITAL
    • 23. CONTROL OVER THE MANAGEMENT
    • 24. FLUCTUATION
  • PREFERENCE SHARES
    • PREFERENCE SHARES ARE THOSE SHARES WHICH ENJOY
    PRIORITIES IN THE PAYMENT OF DIVIDEND AS WELL AS IN
    THE REPAYMENT OF THE CAPITAL
    • PREFERENCE SHAREHOLDERS ARE ENTITLED TO RECEIVE
    A FIXED RATE OF DIVIDEND BEFORE THE DIVIDEND IS
    PAID TO THE EQUITY SHARESHOLDERS.
  • 25. TYPES OF PERFERENCE SHARES
    PARTICIPATING AND NON PARTICIPATING SHARES
    REDEEMABLE AND IRREDEEMABLE SHARES
    CUMULATIVE AND NON CUMULATIVE SHARES
    CONVERTIBLE AND NON CONVERTIBLE SHARES
  • 26. FEATURES OF PREFERENCE SHARES-
    • HYBRID SECURITY
    • 27. PREFERENCIAL RIGHTS
    • 28. PREFERENCIAL RIGHT ON FIXED DIVIDENDS.
    • 29. DEMAND UNPAID ARREARS
    • 30. VOTING RIGHTS
    • 31. CONVERSION OF SHARES
    • 32. RIGHT TO SHARE SURPLUS PROFITS
  • ADVANTAGES OF OWNED FUNDS
    • INDICATES THE OWNERS STAKE AND INTEREST
    • 33. CUSHION FOR RAISING BORROWED FUNDS
    • 34. PROPOTION
    • 35. NO OBLIGATION
    • 36. SAFETY TO THE LENDERS
    • 37. RIGHT TO ACTIVE PARTICIPATION
  • RETAINED EARNINGS
    INSTEAD OF DISRTIBUTING THE ENTIRE PROFITS TO THE
    SHAREHOLERS, COMPANY RETAINS SOME PROFITS FOR
    THE PURPOSE OF-
    ACCUMULATIONS OF EARNINGS
    INVESTMENT IN FIXED ASSETS
    TO MEET WORKING CAPITAL NEEDS
  • 38. MERITS OF PLOUGHING BACK OF PROFITS
    TO THE COMPANY-
    • ECONOMICAL
    • 39. EFFICIENCY AND PRODUCTIVITY
    • 40. CONFIDENCE OF SHAREHOLDERS
    • 41. ENHANCES CREDITWORTHYNESS
    • 42. LESS FINANCIAL RISK
    • 43. REPAYMENTS OF DEBENTURES AND TERM LOANS
    • REDUCES THE RELIANCE
    • 44. HELPS EXPANSION AND DIVERSIFICATION
    • 45. HELPS AUTOMATION AND MODERNISATION
    • 46. USED TO MEET WORKING CAPITAL NEEDS
    • 47. FOLLOWS A STABLE DIVIDEND POLICY
    • 48. FREEDOM TO TAKE THEIR OWN DECISIONS
  • TO THE SHAREHOLDERS
    • APPRECIATION IN SHARE VALUES
    • 49. BONUS SHARES
    • 50. REGULAR DIVIDENDS
    • 51. SECURITY VALUE
    TO THE SOCIETY
    • INCREASES CAPITAL FORMATION
    • 52. HELPS SPEEDY DEVELOPMENT
    • 53. BENEFITS TO THE CONSUMERS
    • 54. SOCIAL WELFARE ACTIVITIES
  • DEMERITS OF PLOGHING BACK OF PROFITS-
    • DANGER OF MANIPULATION
    • 55. CHANCES OF OVER CAPITALISATION
    • 56. IMPROPER USE OF RETAIN EARNINGS
    • 57. NO SHARE OF DIVIDEND
    • 58. LEAD TO EXCESSIVE SPECULATIONS
    • 59. LEAD TO MORE DEMENDS FROM EMPLOYEES
    • 60. CONCENTRATION OF ECONOMIC POWER IN FEW HANDS
  • DETERMINANTS OF INTERNAL FINANCING
    • TOTAL EARNING OF THE ENTERPRISE
    • 61. TAXATION POLICY OF THE GOVERNMENT
    • 62. DIVIDEND POLICY
    • 63. GOVERNMENT ATITUDES AND CONTROL
    • 64. OTHER FACTORS
  • MERITS OF INTERNAL FINANCING
    ADVANTAGES RO THE COMPANY-
    • BEST AND CHEAPEST SOURCE OF FINANCE
    • 65. STABLE DIVIDEND POLICY
    • 66. INCREASE IN MORALE OF MANAGEMENT
    • 67. SAFETY FROM TRADE CYCLES
  • ADVANTAGES TO THE SHAREHOLDER
    • INCRAESE IN THE VALUE OF THE SHARE
    • 68. INCREASE IN EQUITY
    • 69. INCREASE IN THE COLLATERAL VALUE OF SHARES
    ADVANTAGES TO THE SOCIETY
    • CAPITAL FORMATION
    • 70. INCRAESE IN SOCIAL WELFARE
  • DEMERITS OF INTERNAL FINANCING
    • DANGER OF MONOPOLY
    • 71. FEAR OF OVER-CAPITALISATION
    • 72. LOSS OF SHAREHOLDERS
  • Group members-
    Ankita Joshi- 210
    AnujaRane- 231
    ShradhangiDate- 208
    RanalNair- 223
    PrathameshKulkarni- 218
    PrafulShetty- 240
  • 73. THANK YOU