Financial Management

1. GREEN UNIVERSITY OF BANGLADESH
Assignment on
Financial Management
Submitted to
MR. MD. ASAD NOOR
Assistant Professor
Department of Business Administration
Submitted by
S A M Mahfuzul Hoque
ID: 193006050
Department of Business Administration
Date of Submission: 27-07-2021

2. Question – 01: Suppose you have been appointed as a
finance executive of GS Bangla Properties ltd. So being a
finance executive, what will be your essential objective so
that your organization’s goal will be accomplished
Finance is the management of money. Finance is the art and science of managing money. Finance
is the combination of accumulation, utilization and distribution of fund.
Management says plan should be match with organization capacity or ability. In organization for
planning financial activities have to focus organizations existing situation. Plan related with
organizational goal
As a finance executive of GS Bangla Properties ltd I take this essential objective so that my firms’
goal will be accomplished.
Five financial objectives that I follow for accomplish organizational goal
Ensuring regular and adequate supply of fund
At first, I need to ensure or as a financial manager need to ensure the regular and adequate supply
of fund. Because without adequate fund organization can not operate their daily orientation.
Ensuring adequate returns to the share holder
When I get fund, this is utilizing through investment decision. After utilizing the fund, I must
satisfy my shareholder. If we are not providing handsome return against their investment, they are
not no longer to invest next time. For existing return need to focus three terms:
❖ Earning capacity: Sometimes we over promise that we are not capable it creates
negativity. So, promise must be based on earning capacity.
❖ Market price of the share: Earning capacity depends on market piece of the share. If share
market price is good earning capacity is good. For magnify or boost up market per share
must be increase managerial efficiency.
❖ Expectation: Expect based on firms’ capacity.
Ensuring optimum funds utilization

3. Utilizing properly of organizations fund. If utilize the fund optimally it helps to boost up the
objective business finance that is the wealth maximization.
Ensuring safety
Before investing justify safety measure. Before taking investment decision ensure safeness and
consider whether it is safe or not. If there is a possibility of loss how the company we rescue.
Planning and sound capital structure
Here plan for how go I arrange my required capital. How to arrange debt capital? how to arrange
equity capital? What is the percentage of return? Those things are sound capital structure.
.

4. Question – 02: Recently, you observed that there is a
severe conflict between you and your manager Yuan Li
So as an owner, how do you motivate Mr. Yuan Li to act
on behalf of you? Discuss
According this event conflict of interest between two parties called agency problem or opinion
difference between two parties called agency problem. Agency problem is the conflict of interest
between manager and owners.
Agency problem happen by two ways
❖ Manager and stockholders or owner: Here stockholder don’t want to take risk and want to
get return on the other hand manager want to take risk because high risk high return that is
how create a clash between manager and owner.
❖ Managers and creditors: Here managers expectation is which amount creditor get that want
to pay in late on the other hand creditors expectation is which amount he get he want to get
beginning of the month, therefore here create a clash. This is called agency problem
between manager and creditors.
Now I describe how to motivate Mr. Yuan Li from on behalf of I. I follow five criteria. Such
as:
Motivating managers to act in shareholder’s best interest.
Without manager business organization cannot run, but here is lot of conflict between owner
and manager. Here needs some motivation. By providing some incentive agency problem
become vanish.
Managerial compensation
❖ Providing annual salary plus performance bonus
❖ Company shares
❖ Performing shares
❖ Executive stock options

5. Direct intervention by stockholder
When motivating factor are not working then each and every work direct intervention by
stockholders. All power taken from manager. Manager doing work from accountability. If
manager doing work without accountability, then owner can take legal action. Here owner
provide mutule pressure for obligate manager.
Threat of firings
When direct intervention is not working then provide threat of firings.
Threat of takeovers
When threat of firings not working then provide threat of takeover