The key macroeconomic objectives of any government are:
1. Achieving sustainable economic growth
2. Maintaining price stability or controlling inflation
3. Achieving full employment of resources
4. Maintaining a stable balance of payments or external balance
Corporate finance is an area of finance dealing with financial decisions business enterprises make and the tools and analysis used to make these decisions. The primary goal of corporate finance is to maximize corporate value while managing the firm's financial risks. Although it is in principle different from managerial finance which studies the financial decisions of all firms, rather than corporations alone, the main concepts in the study of corporate finance are applicable to the financial problems of all kinds of firms.
Corporate finance is an area of finance dealing with financial decisions business enterprises make and the tools and analysis used to make these decisions. The primary goal of corporate finance is to maximize corporate value while managing the firm's financial risks. Although it is in principle different from managerial finance which studies the financial decisions of all firms, rather than corporations alone, the main concepts in the study of corporate finance are applicable to the financial problems of all kinds of firms.
Class assignment on an introduction to corporate finance which includes the following topics-
1. What is corporate finance?
2. Finance in the organizational structure of a firm
2.1 organization of finance function
2.2 financial manager
3. Finance functions
3.1 executive finance function
3.2 routine finance function
4. Goals of corporate finance
4.1 profit maximization
4.2 limitations of profit maximization
4.3 wealth maximization
4.4 limitations of wealth maximization
5. Corporate finance and related disciplines
5.1 relationship with economics
5.2 relationship with accounting
5.3 relationship with mathematics
6. The agency problem
6.1 agency
6.2 agency problems between shareholders and managers
6.3 resolving conflicts between shareholders and managers
6.4 agency problems between shareholders and creditors
6.5 resolving conflicts between shareholders and creditors
7. Development of corporate finance
Hope you guys find it helpful.
Fundamental of Corporate Finance, chapter 1Yin Sokheng
The objective of the course is to provide an understanding of both the theory of corporate finance fundamentals and how it applies to the “real” world. The main focus of this course is on the corporate financial manger and how he/she reaches decisions. We will cover many issues that are important to a modern financial manager including various advance topics in corporate finance fundamentals such as the essential concepts and understanding of the uses of financial statements and cash flows, ratio analysis, financial planning and growth, time value of money, bonds and stocks valuation, and project valuation.
An Introduction to Managerial Finance prepared for the Graduate School of Business at the University of New England. Slides prepared by Dr Subba Reddy Yarram.
Future Of Hospitality Summit IntroductionAkanshu Jain
The Future of Hospitality Summit (FHS) is Europe’s first student organized conference based on innovation and technology frontiers in the hospitality industry. From presenting influential keynote speakers, to hosting global startups and hospitality students, FHS will allow attendees to gain further knowledge and exceptional networking opportunities.
www.fhsummit.ch #FHS
Presentation about Prague Boutique Hotel Jalta.
The Jalta Hotel Centre Prague is situated on the majestic Wenceslas Square,
a famous locality in Prague pulsating with history and culture. Its location is ideal for an easy passage to Prague’s entertainment as well as access to the financial centre of the city, but it is more commonly known as an historical site in its own right. The most renowned monuments in Prague can also be reached by a leisurely walk.
www.hoteljalta.com
Summer has knocked the door and the sun is all set to be brightened as much as it can. The time has come when we must get ourselves prepared for one on one with summer.
Class assignment on an introduction to corporate finance which includes the following topics-
1. What is corporate finance?
2. Finance in the organizational structure of a firm
2.1 organization of finance function
2.2 financial manager
3. Finance functions
3.1 executive finance function
3.2 routine finance function
4. Goals of corporate finance
4.1 profit maximization
4.2 limitations of profit maximization
4.3 wealth maximization
4.4 limitations of wealth maximization
5. Corporate finance and related disciplines
5.1 relationship with economics
5.2 relationship with accounting
5.3 relationship with mathematics
6. The agency problem
6.1 agency
6.2 agency problems between shareholders and managers
6.3 resolving conflicts between shareholders and managers
6.4 agency problems between shareholders and creditors
6.5 resolving conflicts between shareholders and creditors
7. Development of corporate finance
Hope you guys find it helpful.
Fundamental of Corporate Finance, chapter 1Yin Sokheng
The objective of the course is to provide an understanding of both the theory of corporate finance fundamentals and how it applies to the “real” world. The main focus of this course is on the corporate financial manger and how he/she reaches decisions. We will cover many issues that are important to a modern financial manager including various advance topics in corporate finance fundamentals such as the essential concepts and understanding of the uses of financial statements and cash flows, ratio analysis, financial planning and growth, time value of money, bonds and stocks valuation, and project valuation.
An Introduction to Managerial Finance prepared for the Graduate School of Business at the University of New England. Slides prepared by Dr Subba Reddy Yarram.
Future Of Hospitality Summit IntroductionAkanshu Jain
The Future of Hospitality Summit (FHS) is Europe’s first student organized conference based on innovation and technology frontiers in the hospitality industry. From presenting influential keynote speakers, to hosting global startups and hospitality students, FHS will allow attendees to gain further knowledge and exceptional networking opportunities.
www.fhsummit.ch #FHS
Presentation about Prague Boutique Hotel Jalta.
The Jalta Hotel Centre Prague is situated on the majestic Wenceslas Square,
a famous locality in Prague pulsating with history and culture. Its location is ideal for an easy passage to Prague’s entertainment as well as access to the financial centre of the city, but it is more commonly known as an historical site in its own right. The most renowned monuments in Prague can also be reached by a leisurely walk.
www.hoteljalta.com
Summer has knocked the door and the sun is all set to be brightened as much as it can. The time has come when we must get ourselves prepared for one on one with summer.
,
introduction to financial management
,
what is financial management
,
concept of financial management
,
areas of finance
,
scope/major areas of finance
,
agency theory
,
what is an agency problem
meaning of financial management, objectives of financial management. basic concept of financial management role of finance manager key functions of finance
US Economic Outlook - Being Decided - M Capital Group August 2021.pdfpchutichetpong
The U.S. economy is continuing its impressive recovery from the COVID-19 pandemic and not slowing down despite re-occurring bumps. The U.S. savings rate reached its highest ever recorded level at 34% in April 2020 and Americans seem ready to spend. The sectors that had been hurt the most by the pandemic specifically reduced consumer spending, like retail, leisure, hospitality, and travel, are now experiencing massive growth in revenue and job openings.
Could this growth lead to a “Roaring Twenties”? As quickly as the U.S. economy contracted, experiencing a 9.1% drop in economic output relative to the business cycle in Q2 2020, the largest in recorded history, it has rebounded beyond expectations. This surprising growth seems to be fueled by the U.S. government’s aggressive fiscal and monetary policies, and an increase in consumer spending as mobility restrictions are lifted. Unemployment rates between June 2020 and June 2021 decreased by 5.2%, while the demand for labor is increasing, coupled with increasing wages to incentivize Americans to rejoin the labor force. Schools and businesses are expected to fully reopen soon. In parallel, vaccination rates across the country and the world continue to rise, with full vaccination rates of 50% and 14.8% respectively.
However, it is not completely smooth sailing from here. According to M Capital Group, the main risks that threaten the continued growth of the U.S. economy are inflation, unsettled trade relations, and another wave of Covid-19 mutations that could shut down the world again. Have we learned from the past year of COVID-19 and adapted our economy accordingly?
“In order for the U.S. economy to continue growing, whether there is another wave or not, the U.S. needs to focus on diversifying supply chains, supporting business investment, and maintaining consumer spending,” says Grace Feeley, a research analyst at M Capital Group.
While the economic indicators are positive, the risks are coming closer to manifesting and threatening such growth. The new variants spreading throughout the world, Delta, Lambda, and Gamma, are vaccine-resistant and muddy the predictions made about the economy and health of the country. These variants bring back the feeling of uncertainty that has wreaked havoc not only on the stock market but the mindset of people around the world. MCG provides unique insight on how to mitigate these risks to possibly ensure a bright economic future.
how to sell pi coins on Bitmart crypto exchangeDOT TECH
Yes. Pi network coins can be exchanged but not on bitmart exchange. Because pi network is still in the enclosed mainnet. The only way pioneers are able to trade pi coins is by reselling the pi coins to pi verified merchants.
A verified merchant is someone who buys pi network coins and resell it to exchanges looking forward to hold till mainnet launch.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
how can I sell my pi coins for cash in a pi APPDOT TECH
You can't sell your pi coins in the pi network app. because it is not listed yet on any exchange.
The only way you can sell is by trading your pi coins with an investor (a person looking forward to hold massive amounts of pi coins before mainnet launch) .
You don't need to meet the investor directly all the trades are done with a pi vendor/merchant (a person that buys the pi coins from miners and resell it to investors)
I Will leave The telegram contact of my personal pi vendor, if you are finding a legitimate one.
@Pi_vendor_247
#pi network
#pi coins
#money
when will pi network coin be available on crypto exchange.DOT TECH
There is no set date for when Pi coins will enter the market.
However, the developers are working hard to get them released as soon as possible.
Once they are available, users will be able to exchange other cryptocurrencies for Pi coins on designated exchanges.
But for now the only way to sell your pi coins is through verified pi vendor.
Here is the telegram contact of my personal pi vendor
@Pi_vendor_247
how to sell pi coins effectively (from 50 - 100k pi)DOT TECH
Anywhere in the world, including Africa, America, and Europe, you can sell Pi Network Coins online and receive cash through online payment options.
Pi has not yet been launched on any exchange because we are currently using the confined Mainnet. The planned launch date for Pi is June 28, 2026.
Reselling to investors who want to hold until the mainnet launch in 2026 is currently the sole way to sell.
Consequently, right now. All you need to do is select the right pi network provider.
Who is a pi merchant?
An individual who buys coins from miners on the pi network and resells them to investors hoping to hang onto them until the mainnet is launched is known as a pi merchant.
debuts.
I'll provide you the Telegram username
@Pi_vendor_247
how to sell pi coins in South Korea profitably.DOT TECH
Yes. You can sell your pi network coins in South Korea or any other country, by finding a verified pi merchant
What is a verified pi merchant?
Since pi network is not launched yet on any exchange, the only way you can sell pi coins is by selling to a verified pi merchant, and this is because pi network is not launched yet on any exchange and no pre-sale or ico offerings Is done on pi.
Since there is no pre-sale, the only way exchanges can get pi is by buying from miners. So a pi merchant facilitates these transactions by acting as a bridge for both transactions.
How can i find a pi vendor/merchant?
Well for those who haven't traded with a pi merchant or who don't already have one. I will leave the telegram id of my personal pi merchant who i trade pi with.
Tele gram: @Pi_vendor_247
#pi #sell #nigeria #pinetwork #picoins #sellpi #Nigerian #tradepi #pinetworkcoins #sellmypi
Introduction to Indian Financial System ()Avanish Goel
The financial system of a country is an important tool for economic development of the country, as it helps in creation of wealth by linking savings with investments.
It facilitates the flow of funds form the households (savers) to business firms (investors) to aid in wealth creation and development of both the parties
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what is the best method to sell pi coins in 2024DOT TECH
The best way to sell your pi coins safely is trading with an exchange..but since pi is not launched in any exchange, and second option is through a VERIFIED pi merchant.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and pioneers and resell them to Investors looking forward to hold massive amounts before mainnet launch in 2026.
I will leave the telegram contact of my personal pi merchant to trade pi coins with.
@Pi_vendor_247
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
USDA Loans in California: A Comprehensive Overview.pptxmarketing367770
USDA Loans in California: A Comprehensive Overview
If you're dreaming of owning a home in California's rural or suburban areas, a USDA loan might be the perfect solution. The U.S. Department of Agriculture (USDA) offers these loans to help low-to-moderate-income individuals and families achieve homeownership.
Key Features of USDA Loans:
Zero Down Payment: USDA loans require no down payment, making homeownership more accessible.
Competitive Interest Rates: These loans often come with lower interest rates compared to conventional loans.
Flexible Credit Requirements: USDA loans have more lenient credit score requirements, helping those with less-than-perfect credit.
Guaranteed Loan Program: The USDA guarantees a portion of the loan, reducing risk for lenders and expanding borrowing options.
Eligibility Criteria:
Location: The property must be located in a USDA-designated rural or suburban area. Many areas in California qualify.
Income Limits: Applicants must meet income guidelines, which vary by region and household size.
Primary Residence: The home must be used as the borrower's primary residence.
Application Process:
Find a USDA-Approved Lender: Not all lenders offer USDA loans, so it's essential to choose one approved by the USDA.
Pre-Qualification: Determine your eligibility and the amount you can borrow.
Property Search: Look for properties in eligible rural or suburban areas.
Loan Application: Submit your application, including financial and personal information.
Processing and Approval: The lender and USDA will review your application. If approved, you can proceed to closing.
USDA loans are an excellent option for those looking to buy a home in California's rural and suburban areas. With no down payment and flexible requirements, these loans make homeownership more attainable for many families. Explore your eligibility today and take the first step toward owning your dream home.
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Latino Buying Power - May 2024 Presentation for Latino CaucusDanay Escanaverino
Unlock the potential of Latino Buying Power with this in-depth SlideShare presentation. Explore how the Latino consumer market is transforming the American economy, driven by their significant buying power, entrepreneurial contributions, and growing influence across various sectors.
**Key Sections Covered:**
1. **Economic Impact:** Understand the profound economic impact of Latino consumers on the U.S. economy. Discover how their increasing purchasing power is fueling growth in key industries and contributing to national economic prosperity.
2. **Buying Power:** Dive into detailed analyses of Latino buying power, including its growth trends, key drivers, and projections for the future. Learn how this influential group’s spending habits are shaping market dynamics and creating opportunities for businesses.
3. **Entrepreneurial Contributions:** Explore the entrepreneurial spirit within the Latino community. Examine how Latino-owned businesses are thriving and contributing to job creation, innovation, and economic diversification.
4. **Workforce Statistics:** Gain insights into the role of Latino workers in the American labor market. Review statistics on employment rates, occupational distribution, and the economic contributions of Latino professionals across various industries.
5. **Media Consumption:** Understand the media consumption habits of Latino audiences. Discover their preferences for digital platforms, television, radio, and social media. Learn how these consumption patterns are influencing advertising strategies and media content.
6. **Education:** Examine the educational achievements and challenges within the Latino community. Review statistics on enrollment, graduation rates, and fields of study. Understand the implications of education on economic mobility and workforce readiness.
7. **Home Ownership:** Explore trends in Latino home ownership. Understand the factors driving home buying decisions, the challenges faced by Latino homeowners, and the impact of home ownership on community stability and economic growth.
This SlideShare provides valuable insights for marketers, business owners, policymakers, and anyone interested in the economic influence of the Latino community. By understanding the various facets of Latino buying power, you can effectively engage with this dynamic and growing market segment.
Equip yourself with the knowledge to leverage Latino buying power, tap into their entrepreneurial spirit, and connect with their unique cultural and consumer preferences. Drive your business success by embracing the economic potential of Latino consumers.
**Keywords:** Latino buying power, economic impact, entrepreneurial contributions, workforce statistics, media consumption, education, home ownership, Latino market, Hispanic buying power, Latino purchasing power.
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Currently pi network is not tradable on binance or any other exchange because we are still in the enclosed mainnet.
Right now the only way to sell pi coins is by trading with a verified merchant.
What is a pi merchant?
A pi merchant is someone verified by pi network team and allowed to barter pi coins for goods and services.
Since pi network is not doing any pre-sale The only way exchanges like binance/huobi or crypto whales can get pi is by buying from miners. And a merchant stands in between the exchanges and the miners.
I will leave the telegram contact of my personal pi merchant. I and my friends has traded more than 6000pi coins successfully
Tele-gram
@Pi_vendor_247
2. Finance is the set of activities dealing with the management of
funds
Finance is also the science and art of determining if the funds of
an organization are being used properly
Finance studies and addresses the ways in which individuals,
businesses, and organizations raise, allocate and use monetary
resources over time, taking into account the risks entailed in their
projects
3. Public finance (Government Finance)
Public finance means collection of money through taxes
or other sources and management of revenue and
expenditure by the government
Corporate finance (Business Finance)
Personal finance
Involve paying for education, financing durable goods,
buying insurance, investing and saving for retirement
etc.
5. Corporate Finance refers to any decisions made by a
firm that will have an impact on its financial position.
These decisions may be from production, marketing or
any other department and are assumed to have a
strategic impact.
These decisions are:
◦ Investment Decisions
◦ Financing Decisions
◦ Dividend Decisions
6. Aditya Birla Group to invest $ 500 mn in Turkey
NTPC Ltd to invest Rs 18,346 crore in 2 projects
Groupe SEB buys 55% in Maharaja Whiteline
Srei Equipment Finance, a unit of SREI Infrastructure
Finance is planning to raise Rs 700 million rupees via
5-year 7-month bonds at 12.60 percent
7. Goodwill Hospital and Research Centre, a multi speciality
hospital in Noida under the name " Ojjus Medicare", is
entering the capital market to raise Rs 62 crore with its initial
public offer on December 30, 2011
Liquor maker United Spirits said late on Wednesday its board
approved raising up to $225 million via foreign currency
convertible bonds ( FCCBs) to cut high cost debt and help
improve earnings.
Nestlé India Ltd has declared second interim dividend of Rs.
27.00 per equity share for the year 2011
8. The financial management is generally concerned with
procurement, allocation and control of financial resources of a
concern. The objectives can be-
To ensure regular and adequate supply of funds to the concern.
To ensure adequate returns to the shareholders which will
depend upon the earning capacity, market price of the share,
expectations of the shareholders.
To ensure optimum funds utilization. Once the funds are
procured, they should be utilized in maximum possible way at
least cost.
To ensure safety on investment, i.e. funds should be invested in
safe ventures so that adequate rate of return can be achieved.
To plan a sound capital structure-There should be sound and fair
composition of capital so that a balance is maintained between
debt and equity capital.
9. The scope of financial management can be broken down into
three major decisions as functions of finance:
◦ What long-term investments should the firm take on?
◦ Where will we get the long-term financing to pay for the
investment?
◦ How will we manage the everyday financial activities of the
firm?
10. (1)Investment Decision
Capital budgeting
What long-term investments or projects should the
business take on?
Main elements:
◦ Long term assets and their composition
◦ Risk
◦ The concept and measurement of the cost of capital
Magnitude of cash flows, timing and riskiness of the
cash flows are crucial to consider
11. They influence the firm’s growth in the long run
They affect the risk of the firm
They involve the commitment of large amount of funds
They are irreversible, or reversible at substantial loss
They are among the most difficult decisions to make
12. Working capital management
◦ How do we manage the day-to-day finances of the
firm?
Trade-off between profitability and liquidity
Overall Working Capital management
Efficient management of the individual current assets
13. (2) Financing Decision
Capital structure
◦ How should we pay for our assets?
◦ Should we use debt or equity?
Capital Structure theory
Capital Structure decision
(3) Dividend Policy Decision
o How to deal with the profits of a firm?
o How much profits should be distributed to the
shareholders and how much to retain in the business?
14. What a firm should attempt to achieve with its investments,
financing and dividend policy decisions
Profit maximization (profit after tax)
Maximizing earnings per share
Wealth maximization
But WHOSE WEALTH?
The real reason behind failure in defining the proper objective is
the conflict between stakeholders of the firm.
15. Stockholders or Owners
Bondholders or Lenders
Employees
Financial Markets
Society
16. Maximizing the rupee income of firm
Resources are efficiently utilized
Appropriate measure of firm performance
Serves interest of society also
Objections to Profit Maximization
o It is Vague
o It Ignores the Timing of Returns
o It Ignores Risk
o In new business environment profit maximization is regarded as
o Unrealistic
o Difficult
o Inappropriate
o Immoral
17. Maximising PAT or EPS does not maximise the economic
welfare of the owners.
Ignores timing and risk of the expected benefit
Market value is not a function of EPS.
Maximizing EPS implies that the firm should make no
dividend payment so long as funds can be invested at
positive rate of return—such a policy may not always
work.
18. Maximizes the net present value of a course of action to
shareholders.
Accounts for the timing and risk of the expected benefits.
Benefits are measured in terms of cash flows.
Fundamental objective—maximize the market
value of the firm’s shares.
19. CRITIQUE AND DEFENCE OF SHAREHOLDER WEALTH MAXIMISATION
GOAL
Critique Defence
• The capital market sceptics • Financial economists argue
argue that stock prices fail that stock prices are the
to reflect true values least biased estimates of
intrinsic values in developed
markets
• The balancers argue that a • Balancing the interests of
firm should seek to various stakeholders is not
‘balance’ the interests of a practical governing
various stakeholders objective
• Advocates of social • The only social
responsibility argue that a responsibility of business
business firm must assume is to create value and do so
wider social responsibilities legally and with integrity
20. In your own words, explain the role and importance of
financial management to a manufacturer whose
objective is to improve quality
21. to make sure there are sufficient funds for the organisation to
buy all the resources it needs to achieve its objectives i.e.
appropriate quality of raw materials, correctly trained staff,
well maintained machinery
to make sure there is enough money to recruit and train
appropriately skilled staff to satisfy the objective of improving
quality.
to make sure that all the costs/expenses are under control
to make sure that the organisation is performing profitably and
efficiently without compromising quality
to reduce costs of raw materials by ensuring the best value for
money from suppliers.
22. Estimation of capital requirements
Determination of capital composition
Choice of sources of funds
Investment of funds
Disposal of surplus
Management of cash
Financial controls
23. Stockholders
Hire/Fire & Maximize Stockholder’s
Control Managers Wealth
Lend Money Trace Economic Cost
& Returns
Bondholders Managers taking
Financial Decisions Society
Provide Debt Service & No Negative
Protect their Interests Social Impact
Real & True Market Price
Information = True Value
Financial Markets
24. The Agency Theory was first introduced by Jensen and
Meckling in 1976.
This theory explains how the conflict between various
stakeholders can result in sub-optimal allocation of resources.
Agency relationship exists when one party (the principal) hires
another party (the agency) to perform some services and in doing
so, delegates DM (Decision Making) authority to the agent.
Shareholders are principal and CEO is the agent; if CEO is
principal then managers are agents.
25. Divergent Objectives
Non-observability of Agent’s Actions
26. Stockholders
Have Little Control Maximize Managers Interest at
Stockholder’s Expense
Lend Money
Cannot Trace Cost
Bondholders Managers taking
Financial Decisions Society
Exploitation by Owners & Negative
Default in Payments Social Impact
Delayed & Market Price
Misleading Information ≠ True Value
Financial Markets
27. Agency costs include the less than optimum share value
for shareholders and costs incurred by them to monitor
the actions of managers and control their behaviour.
28. Managerial compensation
◦ Attractive monetary and non monetary incentives
◦ Incentives can be used to align management and stockholder
interests
◦ Close monitoring by stakeholders, board of directors and
outside analysis
◦ The threat of firing
◦ The threat of takeover
1.28
29. Stockholders
Control by Incentive Maximize Stockholder’s
& Other Systems Wealth
Lend Money
Laws & Regulations
Bondholders Managers taking
Financial Decisions Society
Put Stringent Covenants Negative Social
To Safeguard interests Impact Reduced
Information from
Various Sources Market Price
& Legal Remedies ≈ True Value
Financial Markets
30. The importance of the finance function depends on the size of the
firm. Financial management is an integral part of the overall
management of the firm. In small firms, the finance functions are
generally performed by the accounting departments. In large
firms, there is a separate department of finance headed by a
specialist known by different designations such as vice-president,
director of finance, chief finance officer and so on.
31. Board of Directors
Managing Director/Chairman
Vice-President/Director (Finance)/Chief Finance Officer (CFO)
Treasurer Controller
Financial Cash Credit Foreign Cost
Tax accounting
planning and Manager Manager exchange manager
fund-raising manager manager
manager
Capital Pension Corporate Financial
expenditur fund accounting accounting
e manager manager manager manager
Organization of Financial Management Function
34. Key macro-economic factors like the growth rate
of the economy, the domestic savings rate, the
role of the government in economic affairs, the tax
environment, the nature of external economic
relationships, the availability of funds to the
corporate sector, the rate of inflation, the real rate
of interests, and the terms on which the firm can
raise finances define the environment in which the
firm operates. No finance manager can afford to
ignore the key developments in the macro
economic sphere and the impact of the same on
the firm.
35. Growth
Control of inflation
Full employment
External balance (or Balance of payments)
Editor's Notes
Lawrence J. Gitman has defined finance as 'an art and science of managing money'. It implies that finance is Both art and science. Finance is a matured science since it provides knowledge as to how and at what time a firm should invest to outstrip other firms. On the other hand, finance is also an art. In modern time, finance has become more analytical. The new financial theories have been developed. Many data have been developed to prove these theories right or wrong. the financial mangers should examine the differentalternatives related to the raising and managing money. they should formulate the models to predict the results obtained from the use of any one alternative. In this way, the new theories, models and methods have made finance scientific. But the financial theories cannot be accurately compared with the 'Scientific Method' that applies to physics science. Physics predicts as to what happens from an action. for example, physics says that if a ball is thrown upward, that eventually falls down. This is not true in finance. For example, the financial analyst can predict from the historical trend that the rate of interest will change in a definite pattern. But, in reality, the rate of interest may change in different pattern. Despite this, financial guidelines and theories are useful in financial decision making. But any decision should be made by mixing those guidelines with self-skill. According to R.A. Stevenson, in modern time finance is a 'scientific art'. He opines 'finance is the science of knowing how to predict financial consequences and the art of knowing when to act'. It assists the financial managers of today to avoid the difficulties of tomorrow
Incentives – discuss how incentives must be carefully structured. For example, tying bonuses to profits might encourage management to pursue short-run profits and forego projects that require a large initial outlay. Stock options may work, but there may be an optimal level of insider ownership. Beyond that level, management may be in too much control and may not act in the best interest of all stockholders. The type of stock can also affect the effectiveness of the incentive. Corporate control – ask the students why the threat of a takeover might make managers work towards the goals of stockholders. Other groups also have a financial stake in the firm. They can provide a valuable monitoring tool, but they can also try to force the firm to do things that are not in the owners’ best interest.