The document discusses financial concepts related to capital management, including fixed and floating capital, financial models, and asset valuation. It highlights the importance of market value, book value, and restructuring in business operations, as well as the roles of various financial stakeholders. Key considerations include cash flow management, investment returns, and the impact of inflation and interest rates on capital composition.

1. Free Capital
Fixed / Floating
Capital
Financial Model
Control Recapitalization
Redemption
/Convertible
/Transfer
Rebalancing
Rationalization
• Market Value
• Book Value
• Enterprise – Business value
• Fair Market value
Restructuring
Business
operations
Bank /
Finance
house
Promoter/
CFO /
Finance
Manager
Financial
market /
Investors,
Stakeholders
• External , Internal growth
• Long term Efficiency
• Profitability
• Management control
Accounting policy
/ concept
Market
capitalization
+ Owners debt
capital
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Business operations
Treasury Controller
Cash flow model
Taxation
Accounts & Financial
statements
Cash management
Capital generation
Bank /investor
relations
• Decision tree & line of
authority
• Organization structure
• Cash flow relevancy
• Incremental analysis
• Inflation, Interest rate
• Operational Hedging of
financial instruments
• Capital mix
composition changes
• Diversification
Real ,
&
Financial
Assets
-
Instrument
Buyer
/ Lease
Seller
Asset Valuation
Finance/ Portfolio
manager
Market premium
/ Exercise price
Current
Market price
Returns
ReinvestmentInvestment
Returns
ASSET VALUATION &
CORPORATE FINANCE
Distributable reserves
Capital / Undistributable reserves
Asset allocation
& returns
Liquidation
Face value
Replacement
Financial Intermediary