Financial decision making by anil kumar a cfo mantri developers 24 march 2011

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Financial decision making by anil kumar a cfo mantri developers 24 march 2011

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Financial decision making by anil kumar a cfo mantri developers 24 march 2011

  1. 1. ByAnil Kumar AChief Financial Officer,Mantri Developers Private LimitedMarch 24, 2011
  2. 2. Importance of Finance Income from Operation Revenue Treasury/ Ancillary IncomeBusiness is run to Decision Making- earn Money every Stage needs decision making Operational Cost Cost Administrative Cost Legal and Other Cost
  3. 3. Do we take right DECISION ?• A Decision taken impacts a wider Group • Employees • Shareholders • Managers • Environment • Local Community • Suppliers • Government • Consumers
  4. 4. Do we take right DECISION ?• What do we re-collect by these names??? • Manmohan Singh – 1992 Economic Reforms • Warren Buffet – Berkshire Hathway • Marks Zuckerberg – Facebook •Hitler – World War 2 •Mohd. Bin Rashid Almakthum – Dubai’s Financial Crisis • Kenneth Lay – Enron Episode • Ramalinga Raju – Sathyam Disaster
  5. 5. Process involved in Financial Decisionmaking•Identify the Opportunity•Harmonize with the Vision of the Organisation•Factor of affordability•SWOT analysis•Financial evaluation and implications
  6. 6. Key Facilitators of Financial Decision Making •Time Value of Money •Risk and Return •Cash Flows •Pay Back Period •Cost Benefit Analysis
  7. 7. Time Value of Money 1 Rupee in hand today > 1 Rupee in hand a year later Money that you hold today is worth more because you can invest it and earn interest. Key features in Time Value Present Value Future Value Discounting Factor Time Duration/Tenure
  8. 8. Risk and Return Relationship •Higher the Risk – Higher the Returns
  9. 9. Risk Management The basic process steps are: Establish the context Identify the risks Analyse the risks Evaluate the risks Treat the risks
  10. 10. Risk Management ‘Risk’ is dynamic and subject to constant change, so the process includes continuing: Monitoring and review and Communication & consultation
  11. 11. Cash Flow Management • Cash Flows timings are very crucial for decision making • Effective management of Cash Flow leads to •Income Assurance •Ensures timely payment •Keeps out of Debt •Timely Investment •Fuel for all decision making
  12. 12. Relation between 3 fundamental Concepts Owners, Managers, Profit/Cash Flows Accept Positive Net Economic Value of the Employees, Share present Values firm increases value enhances Risk Adjustment

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