This document provides an overview of corporate finance presented by students at Iqra University, Quetta Campus. It defines corporate finance as dealing with decisions taken by corporations to maximize value and minimize risks. The two basic functions are the acquisition of resources like equity and debt, and allocation of resources to investments. It also discusses long and short term decisions, functions like financing, budgeting and risk management, and techniques for investment appraisal and financial analysis.
A simple and comprehensive presentation on Profit maximization v/s Wealth Maximization.
By Arvinder Pal Kaur
Faculty of Management
Northwest Group of Institutions
Dhudhike, MOGA
A simple and comprehensive presentation on Profit maximization v/s Wealth Maximization.
By Arvinder Pal Kaur
Faculty of Management
Northwest Group of Institutions
Dhudhike, MOGA
This presentation provides the complete Role and responsibilities of a person acting as a Finance Manager in any XYZ organization.
One can very well use this as a reference to see the basic Job Description for the post of a Finance Manager and can gain meaningful insights from it.
In simple language working capital can be described as the funds required by an enterprise to finance its day-to-day operations. The working capital of a business is calculated by deducting current liabilities from current assets. Hence, an enterprise has a working capital surplus if its current assets are more than current liabilities. On the other hand, if the current assets are less than current liabilities, the business has a working capital deficiency.
The existing business environment is very turbulent so corporate houses find it very difficult in managing their financial statement. In such scenario, financial management plays significant role for the companies for managing and organizing their financial data and
statements. In the following study different financial tools and techniques will be applied on the London Woods company to analyze its financial performance which will help it in decision making.
What are objectives of financial management?Nageshwar Das
What are Objectives of Financial Management? with Describe Definition, Meaning, Nature and Scope! Financial management is one of the functional areas of business. Therefore, its objectives must be consistent with the overall objectives of the business. The overall objective of financial management is to provide maximum return to the owners on their investment in the long- term. This is known as wealth maximization. Maximization of owners’ wealth is possible when the capital invested initially increases over a period of time. Wealth maximization means maximizing the market value of investment in shares of the company.
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.
LO1 Understand sources of funding and income generation for business and services industries
Funding: sources eg retained profits, loans, banks, investors, small business schemes, franchise, hire purchase, sponsorship, lease schemes, creditors, debt factoring Income generation: methods eg sales, commission, sub-letting, sponsorship, grants, tracking mechanisms
LO2 Understand business in terms of the elements of cost Elements of cost
sales; materials; consumables; labour; overheads; capital; gross and net profits; discount costing Selling prices: product and service costing; formula to achieve a specific gross profit percentage; differential gross/net profit margins; marginal costing; effect of competition; freelance; commission; peak/off-peak trading Control of stock and cash: methods eg storage, purchasing, cash, security, reconciliation, stock-taking Taxation: income tax; Value Added Tax (VAT); corporation tax; schedules; rates; personal/capital allowances; post-tax profits, implications
meaning of financial management, objectives of financial management. basic concept of financial management role of finance manager key functions of finance
Here you'll learn about the different ways to go to school for an MBA such as traditional, online or hybrid. You will also gain knowledge on the differences between them, what to expect, and approximately how long they will take to achieve.
This presentation provides the complete Role and responsibilities of a person acting as a Finance Manager in any XYZ organization.
One can very well use this as a reference to see the basic Job Description for the post of a Finance Manager and can gain meaningful insights from it.
In simple language working capital can be described as the funds required by an enterprise to finance its day-to-day operations. The working capital of a business is calculated by deducting current liabilities from current assets. Hence, an enterprise has a working capital surplus if its current assets are more than current liabilities. On the other hand, if the current assets are less than current liabilities, the business has a working capital deficiency.
The existing business environment is very turbulent so corporate houses find it very difficult in managing their financial statement. In such scenario, financial management plays significant role for the companies for managing and organizing their financial data and
statements. In the following study different financial tools and techniques will be applied on the London Woods company to analyze its financial performance which will help it in decision making.
What are objectives of financial management?Nageshwar Das
What are Objectives of Financial Management? with Describe Definition, Meaning, Nature and Scope! Financial management is one of the functional areas of business. Therefore, its objectives must be consistent with the overall objectives of the business. The overall objective of financial management is to provide maximum return to the owners on their investment in the long- term. This is known as wealth maximization. Maximization of owners’ wealth is possible when the capital invested initially increases over a period of time. Wealth maximization means maximizing the market value of investment in shares of the company.
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.
LO1 Understand sources of funding and income generation for business and services industries
Funding: sources eg retained profits, loans, banks, investors, small business schemes, franchise, hire purchase, sponsorship, lease schemes, creditors, debt factoring Income generation: methods eg sales, commission, sub-letting, sponsorship, grants, tracking mechanisms
LO2 Understand business in terms of the elements of cost Elements of cost
sales; materials; consumables; labour; overheads; capital; gross and net profits; discount costing Selling prices: product and service costing; formula to achieve a specific gross profit percentage; differential gross/net profit margins; marginal costing; effect of competition; freelance; commission; peak/off-peak trading Control of stock and cash: methods eg storage, purchasing, cash, security, reconciliation, stock-taking Taxation: income tax; Value Added Tax (VAT); corporation tax; schedules; rates; personal/capital allowances; post-tax profits, implications
meaning of financial management, objectives of financial management. basic concept of financial management role of finance manager key functions of finance
Here you'll learn about the different ways to go to school for an MBA such as traditional, online or hybrid. You will also gain knowledge on the differences between them, what to expect, and approximately how long they will take to achieve.
Want to explain to a student or new starter what marketing is and why it offers a great career? Here is a short presentation about working in marketing I gave to students aged 14-17 at a school careers event.
Marketing Presentation at the 4th grade Career Day. I wasn't as popular as the guy who gave out Chicken Sandwiches, or the firefighter in full gear (oh well).
A presentation about frauds those took place in financial giants and top most companies of the world during decades. This presentation will be helpful for students information.
1. Final Presentation Introduction ofcorporation finance Muti ur Rehman Khan Lodhi ArshadHussainMengal Students of MBA Iqra University, Quetta Campus April, 2010
2. ACKNOWLEDGEMENT We would like to show our gratitude to our Honorable teacher Mr. Hassan Shahzad, whose great efforts in the term of teaching us Business Finance were very fruitful and knowledgeable for us. We really got precious techniques and knowledge that would be very helpful for future courses as well as in professional life.
3. What is Corporate Finance? Corporate finance is a segment of finance which deals with the decisions taken by the corporation. The primal objective of corporate finance is the maximization of corporate value by minimizing corporate risks. In the study of corporate finance it is important to analyze the long term, short term decisions that are taken in the corporate sector.
4. Simply… Corporate or business finance is all about raising and allocation of funds for increasing profit. Senior management chalks out long-term plan for fulfilling future objectives. Value of the company's stock is a very important issue for the management because it is directly related to the wealth of the share-holders of the company.
5. We Conclude About Corporate Finance Corporate finance and accounting professionals are responsible for managing a business's money, forecasting where it will come from, knowing where it is, and helping its managers decide how to spend it in ways that will ensure the greatest return.
6. Two Basic Functions of Corporate Finance ACQUISITION OF RESOURCES ALLOCATION OF RESOURCES
7. Acquisition of Resources Acquisition of resource means fund generation at lowest possible cost. Equity --- It includes proceeds obtained from stock selling, retained earnings, and investment returns. Liability --- It includes bank loans, warranties of products and payable account.
8. Allocation of Resources Investment of funds for profit maximization motive. Fixed Asset --- Land, Machinery, buildings, etc. Current Asset --- Inventory, cash, receivable accounts, etc.
9. Functions of Corporate Finance Raising of Capital or Financing Budgeting of Capital Corporate Governance Financial management Risk Management
10. Functions of Corporate Finance (Contd) These functions are interrelated and interdependent. For example, in order to launch a project they need to raise capital. So, budgeting of capital and financing are interdependent. Decision making of the corporate finance is basically of two types based on the time period for the same, namely, Long term and Short term.
11. Long Term Decisions It is basically concerned with the capital investment decisions such as viability assessment of the project, financing it through equity or debt, pay dividend or reinvest out of the profit. Long term Corporate finance which are generally related to fixed assets and capital structure are called Capital Investment Decisions. Senior managements always target to maximize the value of the firm by investing in positive NPV (Net Present Value) projects.
12. Short Term Decisions These are also known as working capital management which tries to strike a balance between current assets and fixed assets.
13. Notice One Thing… Corporate finance is slightly different from the accounting one. This can be understood by the help of the following example :- A Steel firm sells steel to a car manufacturer at $100 per ounce (suppose) but has not received the payment for the same. Let the Steel firm's cost of production be $90. Now, according to the accounting rule the profit will be calculated as $(100-90) = $10 per ounce. But according to Corporate Finance the calculation specifications will be :- Inflow of Cash = 0 Outflow of Cash = (90)
14. Financing Decisions There are two ways in which any business can raise financing. It can use the Owner’s funds (equity) Or It can borrow money (debt)
15. Financing Decisions (Contd) The financing decision examines whether the firm’s existing mix of debt and equity is the right one or not. Firms also have to pick from a variety of different financing choices – short term versus long term debt, fixed rate versus floating rate debt- and determine what type of financing is best suited for them.
16. Investment Decisions In making this decision, firms have to grapple with two basic issues. The first is the rate of return that they need to make on an investment, given its risk, for it to be a good investment. The second is how to measure returns on investments, especially when the cash flows on these investments are different from accounting earnings and vary over time.
17. Dividend Decisions After firms make investments with their chosen financing mix, the investments generate cash flows. When the cash flows come in, firms will have to make decisions on how much of these cash flows will be invested back into the business and how much returned to the owners of the business.
18. 1. 2. 3… Investment, financing and dividend decisions made by businesses affect the values of these businesses. In valuation, we attempt to tie inputs into valuation models into basic corporate finance decisions. If the objective in corporate finance is to maximize firm value, good investment, financing and dividend decisions should increase value. Bad decisions should decrease value.
19. Raising of Capital or Finance Raising finance is a complex process. Business management need to assess several alternatives and then negotiate terms which are acceptable to the finance provider. Finance/Capital can be raised through:- Existing shareholders and directors funds Family and friends Clearing banks (overdrafts, short or medium term loans) Factoring and invoice discounting Hire purchase and leasing Merchant banks (medium to longer term loans) Venture capital
20. Budgeting of Capital(A Limited Resource) One duty of a financial manager is to choose investments with satisfactory cash flows and rates of return. Therefore, a financial manager must be able to decide whether an investment is worthy and be able to choose intelligently between two or more alternatives. To do this, a sound procedure to evaluate, compare, and select projects is needed.
21. Budgeting of Capital (Contd) Capital budgeting is investment decision making as to whether a project is worth undertaking. Capital budgeting is basically concerned with the justification of capital expenditures
23. Financial Analysis Traditional Techniques Pay Back Period Expected number of years required to recover a project’s cost. Accounting Rate of Return (ARR) Average Annual Profit Average Investment
24. Financial Analysis(Contd) Discounting Cash flow techniques Net Present Value (NPV) Relevant Cash Flow Working Capital Inflation Taxation Depreciation Internal Rate of Return (IRR) a + A x(b-a) A-B