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Financial management ppt

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Financial management ppt

  1. 1. FINANCIAL MANAGEMENT<br /> LONG TERM SOURCES OF FINANCE WITH EMPHASIS ON <br /> OWNED FUNDS.<br /><ul><li>EQUITY SHARE CAPITAL
  2. 2. PREFERENCE SHARE CAPITAL
  3. 3. RETAINED EARNING</li></li></ul><li>SOURCES OF FINANCE<br />SHORT TERM<br />LONG TERM<br />PURCHASE OF FIXED ASSETS<br />FUNDING EXPANSIONS<br />DIVERSIFICATIONS<br />TRADE CREDITS<br />CREDIT FROM SUPPLIERS<br />ADVANCE FROM DEALERS<br />
  4. 4. LONG TERM FINANCE<br />BORROWED FUNDS<br />OWNED FUNDS<br />SHARES<br />RETAINED EARNING<br />
  5. 5. SHARES<br /><ul><li> A SHARE HAS BEEN DEFINED BY THE INDIAN COMPANIES</li></ul> ACT, 1956 <br /><ul><li> SHARE MEANS SHARE IN THE SHARE CAPITAL OF THE </li></ul> COMPANY & INCLUDES STOCK EXCEPT WHERE A <br /> DISTINCTION BETWEEN STOCK & SHARE IS EXPRESSED<br /> OR IMPLIED. <br /><ul><li> THE LIABILITY OF THE SHAREHOLDER IS LIMITED TO THE </li></ul> EXTENT OF THE FACE VALUE OF THE SHARES.<br />
  6. 6. A SHAREHOLDER- MEMBER OF THE COMPANY<br />NUMBERS OF MEMBERS (MEMBERSHIP ) IN CASE OF A COMPANY<br />PUBLIC COMPANY<br />PRIVATE COMPANY<br />MINIMUM<br />7<br />2<br />MAXIMUM<br />50<br />UNLIMITED<br />
  7. 7. AUTHORISED CAPITAL<br />ISSUED CAPITAL<br />UNISSUED CAPITAL<br />SUBSCRIBED CAPITAL<br />UNSUBSCRIBED CAPITAL<br />CALLED UP CAPITAL<br />UNCALLED CAPITAL<br />RESERVE CAPITAL<br />CALLS IN ARREARS (UNPAID CAPITAL)<br />PAID UP CAPITAL<br />
  8. 8. SHARES<br />EQUITY SHARES<br />PREFERENCE SHARES<br />
  9. 9. EQUITY SHARES<br /><ul><li>RISK BEARING CAPITAL
  10. 10. NO FIXED RATE OF DIVIDEND
  11. 11. RIGHT TO VOTE
  12. 12. OWNERS OF THE COMPANY</li></li></ul><li>RIGHTS OF EQUITY SHAREHOLDERS<br /><ul><li>THE RIGHT TO RESIDUAL INCOME
  13. 13. RIGHT OF CONTROL
  14. 14. PRE-EMPTIVE RIGHT
  15. 15. RESIDUAL CLAIMANTS OVER ASSETS</li></li></ul><li>ADVANTAGES OF EQUITY SHARES<br />TO THE ISSUING COMPANY-<br /><ul><li>PERMANENT SOURCE OF CAPITAL
  16. 16. NO FIX DIVIDEND
  17. 17. CREDITWORTHYNESS OF THE COMPANY</li></li></ul><li>DISADVANTAGES OF THE EQUITY SHARES<br />TO THE ISSUING COMPANY-<br /><ul><li>NOT A TAX-DEDUCTIBLE EXPENSE
  18. 18. FLOATATION COST IS HIGHER
  19. 19. OVER CAPITALISATION
  20. 20. DILUTION OF CONTROL</li></li></ul><li>ADVANTAGES OF EQUITY SHARES<br />TO THE SHAREHOLERS-<br /><ul><li>HIGHLY PROFITABLE SHRES
  21. 21. OWNERS OF THE COMPANY
  22. 22. LIMITED LIABILITY</li></li></ul><li>DISADVANTAGES OF EQUITY SHARES<br />TO THE SHAREHOLERS-<br /><ul><li>RISK CAPITAL
  23. 23. CONTROL OVER THE MANAGEMENT
  24. 24. FLUCTUATION</li></li></ul><li>PREFERENCE SHARES<br /><ul><li>PREFERENCE SHARES ARE THOSE SHARES WHICH ENJOY </li></ul>PRIORITIES IN THE PAYMENT OF DIVIDEND AS WELL AS IN <br /> THE REPAYMENT OF THE CAPITAL<br /><ul><li>PREFERENCE SHAREHOLDERS ARE ENTITLED TO RECEIVE </li></ul>A FIXED RATE OF DIVIDEND BEFORE THE DIVIDEND IS <br />PAID TO THE EQUITY SHARESHOLDERS.<br />
  25. 25. TYPES OF PERFERENCE SHARES<br />PARTICIPATING AND NON PARTICIPATING SHARES<br />REDEEMABLE AND IRREDEEMABLE SHARES<br />CUMULATIVE AND NON CUMULATIVE SHARES<br />CONVERTIBLE AND NON CONVERTIBLE SHARES<br />
  26. 26. FEATURES OF PREFERENCE SHARES-<br /><ul><li>HYBRID SECURITY
  27. 27. PREFERENCIAL RIGHTS
  28. 28. PREFERENCIAL RIGHT ON FIXED DIVIDENDS.
  29. 29. DEMAND UNPAID ARREARS
  30. 30. VOTING RIGHTS
  31. 31. CONVERSION OF SHARES
  32. 32. RIGHT TO SHARE SURPLUS PROFITS</li></li></ul><li>ADVANTAGES OF OWNED FUNDS<br /><ul><li>INDICATES THE OWNERS STAKE AND INTEREST
  33. 33. CUSHION FOR RAISING BORROWED FUNDS
  34. 34. PROPOTION
  35. 35. NO OBLIGATION
  36. 36. SAFETY TO THE LENDERS
  37. 37. RIGHT TO ACTIVE PARTICIPATION</li></li></ul><li>RETAINED EARNINGS<br />INSTEAD OF DISRTIBUTING THE ENTIRE PROFITS TO THE <br />SHAREHOLERS, COMPANY RETAINS SOME PROFITS FOR <br />THE PURPOSE OF-<br />ACCUMULATIONS OF EARNINGS<br />INVESTMENT IN FIXED ASSETS<br />TO MEET WORKING CAPITAL NEEDS<br />
  38. 38. MERITS OF PLOUGHING BACK OF PROFITS<br />TO THE COMPANY-<br /><ul><li>ECONOMICAL
  39. 39. EFFICIENCY AND PRODUCTIVITY
  40. 40. CONFIDENCE OF SHAREHOLDERS
  41. 41. ENHANCES CREDITWORTHYNESS
  42. 42. LESS FINANCIAL RISK
  43. 43. REPAYMENTS OF DEBENTURES AND TERM LOANS</li></li></ul><li><ul><li>REDUCES THE RELIANCE
  44. 44. HELPS EXPANSION AND DIVERSIFICATION
  45. 45. HELPS AUTOMATION AND MODERNISATION
  46. 46. USED TO MEET WORKING CAPITAL NEEDS
  47. 47. FOLLOWS A STABLE DIVIDEND POLICY
  48. 48. FREEDOM TO TAKE THEIR OWN DECISIONS</li></li></ul><li>TO THE SHAREHOLDERS<br /><ul><li>APPRECIATION IN SHARE VALUES
  49. 49. BONUS SHARES
  50. 50. REGULAR DIVIDENDS
  51. 51. SECURITY VALUE</li></ul>TO THE SOCIETY<br /><ul><li>INCREASES CAPITAL FORMATION
  52. 52. HELPS SPEEDY DEVELOPMENT
  53. 53. BENEFITS TO THE CONSUMERS
  54. 54. SOCIAL WELFARE ACTIVITIES</li></li></ul><li>DEMERITS OF PLOGHING BACK OF PROFITS-<br /><ul><li>DANGER OF MANIPULATION
  55. 55. CHANCES OF OVER CAPITALISATION
  56. 56. IMPROPER USE OF RETAIN EARNINGS
  57. 57. NO SHARE OF DIVIDEND
  58. 58. LEAD TO EXCESSIVE SPECULATIONS
  59. 59. LEAD TO MORE DEMENDS FROM EMPLOYEES
  60. 60. CONCENTRATION OF ECONOMIC POWER IN FEW HANDS</li></li></ul><li>DETERMINANTS OF INTERNAL FINANCING<br /><ul><li>TOTAL EARNING OF THE ENTERPRISE
  61. 61. TAXATION POLICY OF THE GOVERNMENT
  62. 62. DIVIDEND POLICY
  63. 63. GOVERNMENT ATITUDES AND CONTROL
  64. 64. OTHER FACTORS</li></li></ul><li>MERITS OF INTERNAL FINANCING<br />ADVANTAGES RO THE COMPANY-<br /><ul><li>BEST AND CHEAPEST SOURCE OF FINANCE
  65. 65. STABLE DIVIDEND POLICY
  66. 66. INCREASE IN MORALE OF MANAGEMENT
  67. 67. SAFETY FROM TRADE CYCLES</li></li></ul><li>ADVANTAGES TO THE SHAREHOLDER<br /><ul><li>INCRAESE IN THE VALUE OF THE SHARE
  68. 68. INCREASE IN EQUITY
  69. 69. INCREASE IN THE COLLATERAL VALUE OF SHARES</li></ul>ADVANTAGES TO THE SOCIETY<br /><ul><li>CAPITAL FORMATION
  70. 70. INCRAESE IN SOCIAL WELFARE</li></li></ul><li>DEMERITS OF INTERNAL FINANCING<br /><ul><li>DANGER OF MONOPOLY
  71. 71. FEAR OF OVER-CAPITALISATION
  72. 72. LOSS OF SHAREHOLDERS</li></li></ul><li>Group members-<br />Ankita Joshi- 210<br />AnujaRane- 231<br />ShradhangiDate- 208<br />RanalNair- 223<br />PrathameshKulkarni- 218<br />PrafulShetty- 240<br />
  73. 73. THANK YOU<br />

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