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Imd fm2 (baf103) pres 2nd meeting (111911)


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Imd fm2 (baf103) pres 2nd meeting (111911)

  2. 2. Financial Management I Risks Organizational Purpose and Goals Financial Policies Strategies <ul><li>Decisions </li></ul><ul><li>Asset management </li></ul><ul><li>Investment decisions </li></ul><ul><li>Financing decisions </li></ul><ul><li>Dividend policy </li></ul><ul><li>Valuation of the firm </li></ul>Financial Management II Analysis Wealth maximization Long-term financing Capital budgeting Risk management Capital acquisition analysis Capital structure decision Dividend decision Valuation of financial instruments
  3. 3. FINANCIAL MANAGEMENT II <ul><li>Topics under Financial Management II </li></ul><ul><li>Risk and Return of Assets </li></ul><ul><li>Risk Management </li></ul><ul><li>Valuation of Financial Assets </li></ul><ul><ul><li>Bonds </li></ul></ul><ul><ul><li>Stocks </li></ul></ul><ul><li>Long-term Investment Decisions </li></ul><ul><ul><li>Capital Budgeting </li></ul></ul><ul><ul><li>Advanced Investing Decisions </li></ul></ul><ul><li>Long-term Financing Decisions </li></ul><ul><ul><li>Cost of Capital </li></ul></ul><ul><ul><li>Leverage and Capital Structure </li></ul></ul><ul><ul><li>Dividend Policy </li></ul></ul>
  4. 4. FINANCIAL MANAGEMENT II <ul><li>Topics under Financial Management II </li></ul><ul><li>Mergers and Acquisitions </li></ul><ul><li>International Financial Management Decisions </li></ul><ul><li>Financial Objectives of Special Types of </li></ul><ul><li>Organizations </li></ul><ul><li>Financial Management in the Public Sector </li></ul><ul><li>Other Topics </li></ul>
  5. 5. FINANCIAL MANAGEMENT II <ul><li>Strategies/Methods of Learning the Course </li></ul><ul><li>Lecture (concepts, principles, computations, case </li></ul><ul><li>studies) </li></ul><ul><li>Recitations </li></ul><ul><li>Seatwork (includes solving exercises/problems in </li></ul><ul><li>the blackboard and explaining the answers/ </li></ul><ul><li>solutions </li></ul><ul><li>Assignments (readings, exercises/problems for </li></ul><ul><li>solving) </li></ul><ul><li>Group Discussion/Group Presentation </li></ul><ul><li>Invitation of resource speakers (accomplished </li></ul><ul><li>individuals or experts in the field) </li></ul>
  6. 6. FINANCIAL MANAGEMENT II Let’s have a quick review of Financial Management I !
  7. 7. FINANCIAL MANAGEMENT II What is Financial Management?
  8. 8. FINANCIAL MANAGEMENT II Financial management is the business function that concerns the acquisition , financing and management of assets with the primary goal of maximizing shareholders’ wealth by increasing the value of their shares.
  9. 9. FINANCIAL MANAGEMENT II Investment Decisions <ul><li>What is the optimal firm size? </li></ul><ul><li>What specific assets should be acquired? </li></ul><ul><li>What assets (if any) should be reduced or eliminated? </li></ul>
  10. 10. FINANCIAL MANAGEMENT II Financing Decisions <ul><li>What is the best type of financing? </li></ul><ul><li>What is the best financing mix? </li></ul><ul><li>What is the best dividend policy? </li></ul><ul><li>How will the funds be physically acquired? </li></ul>
  11. 11. FINANCIAL MANAGEMENT II Asset Management Decisions <ul><li>How do we manage existing assets </li></ul><ul><li>efficiently? </li></ul>
  12. 12. Trade-off Daily Cash management (receipt and disbursement of funds) Credit management Inventory control Short-term financing Exchange and interest rate hedging Bank relations Intermediate financing Bond issues Leasing Stock issues Capital budgeting Dividend decisions Forecasting Profitability Risk Goal: Maximize shareholder wealth PPT 1-10 Occasional FINANCIAL MANAGEMENT II Functions of the Finance Manager