Financial Management topics

1. DISCOVER . LEARN . EMPOWER
Financial Management
DEPARTMENT : MBA – Industry Collaborated Programs
Faculty Name: CD Singh
Subject Name- Financial Management
Subject Code: 22BBT-671/22BLT-651/22MFT-671/22BFT-671
UNIT-1 (Introduction to Financial Management)

2. List of Topics (Unit I)
Topic No Name of the Topic
1 Introduction
Concept of FM
2 Value Maximization Vs Profit Maximization
3 Basic Financial Decisions
4 Investment
5 Financing
6 Dividend Decisions
7 Sources of Finance
8 Cost Volume Profit Analysis
Costing
9 Leverage Analysis – Operating, Financing and Combined Leverage
10 Capital Structure Theories
Break Even
Analysis
11 EBIT EPS Analysis
12 Financial Break Even Point
13 Point of Indifference
14 Optimum Capital Structure

3. What is Financial Management?
Finance is the art and science of managing money.
Financial Management refers to planning, organizing, directing and
controlling the financial activities (such as procurement, utilization and
distribution/disposal of funds)

4. It means applying general management principles to financial resources of the enterprise.
Example: Starting a business.
It refers to efficient:
1. Acquisition of finance
2. Utilization of finance
3. Distribution and disposal of surplus (profit distribution)
for smooth working of company.

5. Scope of Financial Management
.

6. I. Financing Decisions
Financing decisions are the financial decisions related to raising of finance. It
involves identification of various sources of finance and the quantum
of finance to be raised from long-term and short-term sources.
The financing decision involves two sources from where the funds can be
raised: using a company’s own money, such as share capital, retained earnings
or borrowing funds from the outside in the form debenture, loan, bond, etc. The
objective of financial decision is to maintain an optimum capital structure, i.e.
a proper mix of debt and equity, to ensure the trade-off between the risk and
return to the shareholders.

7. II.Investment Decisions:
The Investment Decision relates to the decision made by the finance manager with
respect to the amount of funds to be deployed in different type of assets.
These assets fall into two categories:
•Long Term Assets - building and/or land, acquiring new plants/machinery or
replacing the old ones, etc
•Short-Term Assets - investment in current assets

8. III. Dividend Decisions
These involve decisions related to the portion of profits that will be
distributed as dividend. Shareholders always demand a higher dividend,
while the management would want to retain profits for business needs
(expansion is one of them)

9. 1. What is finance?
2. Is Finance a science or an art?
3. How is it science?
4. How is it an art?
5. What is the meaning of FM ?
6. What are the steps taken for starting a business?
7. What is the scope of FM?
8. What is debt?
9. What is equity?
10.What is an asset?
11.What is a liability?
12.Name any two long term assets?
13.Name any two short term assets?
14.Name any two liabilities?
15.What is a budget?
16.What is capital budgeting?
17.What is working capital ?
18.Based on term period, what are the two types of investment decision?
19.How is optimum capital structure achieved?
20.What is application of general management principles to financial resources of the enterprise called?

10. THANK YOU
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