2. Finance
Finance is the study of money
management, investments, and
financial markets.
It deals with how individuals,
businesses, and governments
allocate their resources over time. In
today's world, finance plays a crucial
role in shaping our economy and
society.
From managing personal finances to
making strategic business decisions,
understanding finance is essential for
success in any field.
3. Why Financial Management Matters
• Financial management is crucial for individuals
and organizations alike. It allows us to make
informed decisions about our money, plan for
the future, and avoid costly mistakes. Without
proper financial management, we risk falling
into debt, missing out on opportunities, and
failing to achieve our
4. Individuals
• For individuals, financial management means
being able to
• save for retirement,
• pay off debts, and afford the things we need
and want in life.
• It also means being prepared for unexpected
expenses, such as medical bills or car repairs
5. Organisations
• For organizations, financial management
means being able to invest in growth, manage
cash flow, and stay competitive in the market.
It can mean the difference between success
and failure.
7. Byjus Troubles Have Made Edtech A
Stigmatised Word
Investors have already increased scrutiny as they focus on profitability,
unearthing questionable practices at India's privately held tech-backed
ventures like GoMechanic and Mojocare. They will be even more selective
now.
Byju's, once the poster boy of India's online coaching industry, is now in the
spotlight for weak corporate and financial governance, debt default, searches
by the Enforcement Directorate and a potential a probe by the Ministry of
Corporate Affairs.
To ensure its long-term survival, he said, Byju's must effectively address the
legal loan battle, manage its financial obligations, rebuild investor confidence,
and sustain its position in the competitive edtech market. "Byju's will need to
navigate these challenges skillfully to overcome them and secure a viable
future."
8. Money matters for Byjus – financial
management
• Byju's faces deadline for $40 million payment. Byju's has until July 10 to pay $40 million in interest
on a term loan it raised in November 2021. The company has been struggling to raise funds due to
the recent economic downturn, and it is unclear if it will be able to make the payment.
• Byju's begins another round of layoffs; to impact 500-1000 employees. Byju's has begun another
round of layoffs, which is expected to impact 500-1000 employees. The layoffs come as the
company is facing financial difficulties and is trying to cut costs.
• Byju's auditor Deloitte Haskins resigns citing delay in FY22 financial statement. Deloitte Haskins, the
auditor of Byju's, has resigned citing the delay in the company's FY22 financial statement. The
resignation comes as Byju's is facing scrutiny from investors and regulators over its financial
practices.
• Byju's lenders open to negotiations, seek draft loan amendment proposal. Byju's lenders have
opened to negotiations with the company, and are seeking a draft loan amendment proposal. The
lenders are concerned about Byju's financial situation, and are looking for ways to protect their
interests.
• Peak XV, Prosus and Chan Zuckerberg confirm exit from Byju's board. Peak XV, Prosus and Chan
Zuckerberg have confirmed their exit from the board of Byju's. The three investors have been
unhappy with the company's financial performance, and have decided to step down.
• Byju's tells investors it will file 2022 earnings by Sept
9. What went wrong for Byjus ?
• Financial planning and forecasting:
• Budgeting:
• Cash management:
• Investment:
• Risk and Debt management:
11. Introduction
• Financial management is the process of planning,
organizing, and controlling the financial resources
of a business.
• The objectives of financial management are to
maximize shareholder wealth, ensure adequate
returns to investors, and maintain a sound
financial structure.
• These objectives can be achieved through a
variety of financial decisions, such as investment
decisions, financing decisions, and dividend
decisions.
12. Profit maximisation
It is achieved by increasing revenue, reducing
costs, or both.
For example, a company might increase revenue
by introducing new products or expanding into
new markets.
It might reduce costs by negotiating better deals
with suppliers or by streamlining its operations.
13. Maximize shareholder wealth
• The primary objective of financial management is
to maximize shareholder wealth.
• This means that the financial decisions made by a
business should be in the best interests of its
shareholders.
• There are a number of ways to maximize
shareholder wealth, such as:
– Investing in profitable projects
– Maintaining a low cost of capital
– Paying dividends to shareholders
14. Wealth maximisation as an operational
criteria
• Here are some examples of how wealth maximization can be
applied to operational decisions in financial management:
• A company decides to invest in a new factory that will increase its
production capacity. This investment will increase the company's
profits in the long term, which will lead to an increase in the value
of the company's shares.
• A company decides to acquire another company in order to expand
its market share and increase shareholder value. This acquisition
will increase the company's profits in the long term, which will lead
to an increase in the value of the company's shares.
• A company decides to pay a dividend to its shareholders in order to
increase their wealth. This dividend will increase the shareholders'
cash flow, which will increase the value of their shares.
15. Ensure adequate returns to investors
• In addition to maximizing shareholder wealth,
financial management should also ensure
adequate returns to investors.
• This means that the financial decisions made by a
business should provide a fair return on
investment for its investors.
• There are a number of ways to ensure adequate
returns to investors, such as:
– Investing in safe and secure projects
– Managing risk effectively
16. Maintain a sound financial structure
• This means that the business should have a
balance between debt and equity financing.
• A sound financial structure will help the
business to weather economic downturns and
to grow over time.
17. Other objectives
• Lliquidity: This refers to the ability of a company to
meet its short-term financial obligations. A liquid
company has enough cash on hand or easily accessible
assets to pay its bills when they are due. For example, a
company might maintain a cash reserve or sell some of
its inventory to raise cash.
• Solvency: This refers to the ability of a company to pay
its debts in the long term. A solvent company has
enough assets to cover its liabilities. For example, a
company might issue bonds or take out loans to raise
capital.
18. Other Objectives
• Growth: This refers to the expansion of a company's
operations. A growing company is one that is
increasing its revenue, profits, and market share. For
example, a company might expand into new markets,
develop new products, or acquire other companies.
• Risk management: This refers to the identification,
assessment, and mitigation of risks to a company's
financial health. For example, a company might insure
its assets against damage or loss, or it might hedge its
exposure to foreign exchange risk.
19. Byjus
• Overcharging customers: Byju's has been accused of charging
customers exorbitant fees for its products and services. In some
cases, customers have reported being charged thousands of
dollars for courses that they never completed.
• Misrepresenting the effectiveness of its products: Byju's has
been accused of misrepresenting the effectiveness of its
products. The company has been known to use misleading
advertising to make it seem like its products are more effective
than they actually are.
• Using aggressive sales tactics: Byju's has been accused of using
aggressive sales tactics to pressure customers into buying its
products. In some cases, customers have reported being
harassed by sales representatives who refused to take no for an
answer.
20. • Consumer Financial Protection Bureau for misleading customers about its products. The company is
also facing a class-action lawsuit from customers who allege that they were overcharged for its
products.
• Byju's has denied any wrongdoing. The company has said that it is committed to providing its
customers with the best possible products and services. However, the agency problems that have
been alleged against the company raise serious concerns about its business practices.
• , Byju's has also been accused of:
• Failing to deliver on its promises: Byju's has been accused of failing to deliver on its promises to
customers. In some cases, customers have reported that they did not receive the promised level of
customer support or that their courses were not as effective as they were led to believe.
• Engaging in unfair and deceptive practices: Byju's has been accused of engaging in unfair and
deceptive practices. In some cases, customers have reported that they were misled about the
terms of their contracts or that they were pressured into signing contracts that they did not
understand.
• These allegations have led to a number of investigations into Byju's business practices. In 2022, the
Competition Commission of India (CCI) launched an investigation into the company's alleged anti-
competitive practices. The CCI is also investigating whether Byju's has engaged in unfair and
deceptive practices.
21. Agency Problem
• An agency problem in financial management
is a conflict of interest that arises when the
interests of the principal (the owner of the
assets) and the agent (the person who
manages the assets) are not aligned. This can
lead to the agent taking actions that benefit
themselves at the expense of the principal.
22. Resolving Agency Problems
• Market Forces
• There are two main ways that agency
problems can be prevented or minimized
through market forces:
• Behavior of security market
participants: Apple inc proxy strike
• Hostile takeovers: L&T finance takeover of
Mindtree
25. Emerging trends in financial
management
1.Digital transformation
2. Big data and analytics are becoming increasingly
important in financial management.
3. Cryptocurrency
4. Alternative financing
5. Digital finance
6. Environmental, social, and governance (ESG)
investing
7. Robo-advisors
