Finance   By: Noor ul hadi (Lecturer)Govt College of Management Sciences              Peshawar
What is Finance1. Finance is the art of to raise fund and best  allocation or utilization to achieve organizational  goal....
Finance vs FinancingFinance:   Finance is a branch of economics that deals with the   management of funds, financial resou...
FINANCE (Functions)F:-   Financial Planning/ ForecastingI:-   Investment DecisionN:-   Negotiation and ConsultationA:-   A...
F:- Financial Planning/ Forecastinga. To determine the required amount of capitalb. To decide the sources of capital (fund...
I:- Investment DecisionSelection of Assets to be acquired for the   business.a. Current Assets (Working Capital Management...
N:- Negotiation and Consultation• Negotiation ad consultation with other  departmental heads so as to take positive  inves...
A:- Allocation of FundsAllocation of Fund among the selected  Assets.• Investment in Capital Market• Investment in Money M...
N:- Net Result Estimation or Standard Setting• Standards:   – Output Standard/Quantity Standard.   – Cost Standard.   – Qu...
C:- Control of Financial Resources• Actual, Standard and Budgeting  – Minimizing the Variances to retain favorable    vari...
E:- Evaluation & Revision• Change required for improvement and  value of the firm.• Change required for decision.• The eva...
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L01 finance

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L01 finance

  1. 1. Finance By: Noor ul hadi (Lecturer)Govt College of Management Sciences Peshawar
  2. 2. What is Finance1. Finance is the art of to raise fund and best allocation or utilization to achieve organizational goal.2. A branch of economics concerned with resource allocation as well as resource management, acquisition and investment. Simply, finance deals with matters related to money and the markets.
  3. 3. Finance vs FinancingFinance: Finance is a branch of economics that deals with the management of funds, financial resources and other assets. In broader terms, finance is raising or investing money either as equity or debt. Financing: The process or means of acquiring capital necessary to conduct a business activity. Two of the most common forms of financing are debt financing and equity financing.
  4. 4. FINANCE (Functions)F:- Financial Planning/ ForecastingI:- Investment DecisionN:- Negotiation and ConsultationA:- Allocation of FundsN:- Net Result Estimation or Standard SettingC:- Control of Financial ResourcesE:- Evaluation & Revision
  5. 5. F:- Financial Planning/ Forecastinga. To determine the required amount of capitalb. To decide the sources of capital (fund) a. Internal Sources (Owner Capital) b. External Sources (Debt Capital/Leverage Capitalc. To Finalize Capital Structure (Combination of own & Debt capital ratio)d. To Decide investment Mix– utilization of D/E ratio.
  6. 6. I:- Investment DecisionSelection of Assets to be acquired for the business.a. Current Assets (Working Capital Management) - Cash Management - A/R Management - Inventory Managementa. Fixed Assets (Capital Budgeting)Capital Budgeting is to acquired long run Assets.
  7. 7. N:- Negotiation and Consultation• Negotiation ad consultation with other departmental heads so as to take positive investment decisionMBO “Management by Objective.Consultative and Participative Management.
  8. 8. A:- Allocation of FundsAllocation of Fund among the selected Assets.• Investment in Capital Market• Investment in Money Market.
  9. 9. N:- Net Result Estimation or Standard Setting• Standards: – Output Standard/Quantity Standard. – Cost Standard. – Quality Standard
  10. 10. C:- Control of Financial Resources• Actual, Standard and Budgeting – Minimizing the Variances to retain favorable variances. – Stock Control. – Labor Cost Control • Time In, Time Out, Time booked( time in work operation)
  11. 11. E:- Evaluation & Revision• Change required for improvement and value of the firm.• Change required for decision.• The evaluation of things with standard.

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