Financial management deals with planning and controlling a firm's financial resources. It involves three main functions: investment decisions, financing decisions, and dividend decisions. The investment decision involves deciding how funds should be allocated to long-term assets through capital budgeting and short-term assets through working capital management. The financing decision determines the optimal mix of debt and equity. The dividend decision establishes the portion of profits to distribute to shareholders versus retaining for reinvestment. The objectives of financial management are typically to maximize profits or shareholder wealth through efficient allocation of funds.
Financial Management — objectives — profit maximization, wealth maximization — finance function — role of finance manager — strategic financial management — economic value added — time value of money.
Financial Management — objectives — profit maximization, wealth maximization — finance function — role of finance manager — strategic financial management — economic value added — time value of money.
What is Finance, Approaches to finance function, Traditional approach, Modern approach, Limitations Of Traditional Approach, Profit maximization approach, Wealth Maximisation approach,
FINANCIAL MANAGEMENT, ROLE OF FINANCIAL MANAGEMENT, IMPORTANCE OF FINANCIAL MANAGEMENT, FEATURES OF FINANCIAL MANAGEMENT, SCOPE OF FINANCIAL MANAGEMENT, FUTURE OF FINANCIAL MANAGEMENT, etc.
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.
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introduction to financial management
,
what is financial management
,
concept of financial management
,
areas of finance
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scope/major areas of finance
,
agency theory
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what is an agency problem
Cash flow is the flow of money in and out of the business. Managing your cash flow is vital for business survival and growth, even if you have existing cost savings programs in your organization.
The impact of disasters such as COVID-19 has driven the global economy into a recession and many businesses are only just trying to survive. Before taking drastic actions such as cutting salaries and staff, you might want to review your current cash flow performance to stem unnecessary cash outflow and eliminate waste in your processes.
To run your business effectively, you need to balance the timing and amount of your expenses with those of your income. This training presentation explains the various areas you need to consider when managing and improving cash flow in your business.
LEARNING OBJECTIVES:
1. Explain what cash flow means
2. Understand the cash flow cycle and importance of cash flow to a business
3. Identify major causes of cash flow problems
4. Define strategies to improve cash flow
5. Gain knowledge on eliminating waste to improve cash flow
6. Learn how to forecast cash flow
CONTENTS:
1. Introduction to cash flow
2. Causes of cash flow problems
3. Strategies to improve cash flow
4. Improving cash flow through waste elimination
5. Cash flow forecasting
To download this complete presentation, please visit: http://www.oeconsulting.com.sg
Business Finance: Introduction to Business Finance, Meaning and Definition of Financial Management, Objectives of Financial Management- (Profit Maximization and Wealth Maximization), Modern Approach to Financial Management- (Investment Decision, Financing Decision, Dividend Policy Decision), Finance and its relation with other disciplines, Functions of Finance Manager
What is Finance, Approaches to finance function, Traditional approach, Modern approach, Limitations Of Traditional Approach, Profit maximization approach, Wealth Maximisation approach,
FINANCIAL MANAGEMENT, ROLE OF FINANCIAL MANAGEMENT, IMPORTANCE OF FINANCIAL MANAGEMENT, FEATURES OF FINANCIAL MANAGEMENT, SCOPE OF FINANCIAL MANAGEMENT, FUTURE OF FINANCIAL MANAGEMENT, etc.
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.
,
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
Cash flow is the flow of money in and out of the business. Managing your cash flow is vital for business survival and growth, even if you have existing cost savings programs in your organization.
The impact of disasters such as COVID-19 has driven the global economy into a recession and many businesses are only just trying to survive. Before taking drastic actions such as cutting salaries and staff, you might want to review your current cash flow performance to stem unnecessary cash outflow and eliminate waste in your processes.
To run your business effectively, you need to balance the timing and amount of your expenses with those of your income. This training presentation explains the various areas you need to consider when managing and improving cash flow in your business.
LEARNING OBJECTIVES:
1. Explain what cash flow means
2. Understand the cash flow cycle and importance of cash flow to a business
3. Identify major causes of cash flow problems
4. Define strategies to improve cash flow
5. Gain knowledge on eliminating waste to improve cash flow
6. Learn how to forecast cash flow
CONTENTS:
1. Introduction to cash flow
2. Causes of cash flow problems
3. Strategies to improve cash flow
4. Improving cash flow through waste elimination
5. Cash flow forecasting
To download this complete presentation, please visit: http://www.oeconsulting.com.sg
Business Finance: Introduction to Business Finance, Meaning and Definition of Financial Management, Objectives of Financial Management- (Profit Maximization and Wealth Maximization), Modern Approach to Financial Management- (Investment Decision, Financing Decision, Dividend Policy Decision), Finance and its relation with other disciplines, Functions of Finance Manager
The Future of Digital Lending in Ethiopia
The traction that met Michu and Telebirr early on highlights the massive demand for uncollateralized digital credit in Ethiopia. New entrants such as Kacha Digital Financial services have also announced they’re eying the micro-credit market. The impending entrance of Safaricom’s M-PESA is undoubtedly going to have an impact, but the telecom operator must wait until the National Bank of Ethiopia (NBE) sets rules before it can enter the fray.
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For instance, In Kenya, Digital Credit Providers (DCPs) were not regulated by the central bank until recently and sourced funds from various sources without having to disclose them to the central bank.
Nonetheless, close to 300 DCPs have applied for licenses from the Kenyan central bank this year after regulators put out a call following a decision that compels lenders to disclose their source of funding. Ten of them have already been licensed. Development Financial Institutions, commercial banks, private equity firms and high-net-worth individuals are some of the popular sources of funding that Kenya-based DCPs use for lending.
The implementation of various models of lending come with their own advantages and disadvantages. Here are the possible opportunities and threat that the Ethiopian market will experience as a result of the upcoming changes:
Opportunities
Encourages the development of new lending models such as peer-to-peer (P2P lending). Countries with advanced digital lending models have progressed to be able to offer a slew of innovative lending products. Diversifying the source of funds would allow creditors to experiment with innovative use cases based on their own risk appetite as they’ll be able to retain the risk on their own.
Provides a more attractive business cases.
meaning of financial management, objectives of financial management. basic concept of financial management role of finance manager key functions of finance
The What, Why & How of 3D and AR in Digital CommercePushON Ltd
Vladimir Mulhem has over 20 years of experience in commercialising cutting edge creative technology across construction, marketing and retail.
Previously the founder and Tech and Innovation Director of Creative Content Works working with the likes of Next, John Lewis and JD Sport, he now helps retailers, brands and agencies solve challenges of applying the emerging technologies 3D, AR, VR and Gen AI to real-world problems.
In this webinar, Vladimir will be covering the following topics:
Applications of 3D and AR in Digital Commerce,
Benefits of 3D and AR,
Tools to create, manage and publish 3D and AR in Digital Commerce.
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https://nidmindia.com/
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SMM Cheap - No. 1 SMM panel in the worldsmmpanel567
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2. Definition of Financial
Management
Managerial activities which deals with planning and controlling of firms
and financial sources.
Financial management is an area of financial decision making,
harmonsing individual motives and enterprise goals.
- Weston Brigham
3. Scope of financial
management
The scope and functions of financial management is
classified in two categories.
- Traditional approach
- Modern approach
4. Traditional approach
According to this approach, the scope of the finance
function is restricted to “procurement of funds by
corporate enterprise to meet their financial needs.
The term ‘procurement’ refers to raising of funds
externally as well as the inter related aspects of raising
funds.
5. Traditional approach
In traditional approach the resources could be raised from
the combination of the available sources.
The inter related aspects are the institutional
arrangement for finance, financial instruments through
which funds are raised and legal and accounting
aspects between the firm and its sources of funds.
6. Limitations of traditional
approach
This approach is confirmed to ‘procurement of funds’ only.
It fails to consider an important aspects i.e.
allocation of funds.
It deals with only outside I.e. investors,
investment bankers.
7. Limitations of traditional
approach
The internal decision making is completely
ignored in this approach.
The traditional approach fails to consider the
problems involved in working capital
management.
The traditional approach neglected the issues
relating to the allocation and management of
funds and failed to make financial decisions.
8. Modern approach
The modern approach is an analytical way of
looking into financial problems of the firm.
According to this approach, the finance
function covers both acquisition of funds as
well as the allocation of funds to various uses.
Financial management is concerned with the
issues involved in raising of funds and efficient
and wise allocation of funds.
9. Main Contents of Modern
approach
How large should an enterprise be and how far
it should grow?
In what form should it hold its assets?
How should the funds required be raised?
- Financial management is concerned with
finding answer to the above problems.
10. Functions of Finance
There are three finance functions
Investment decision
Financing decision
Dividend decision
11. Investment Decision
Investment decision relates to selections of
asset in which funds will be invested by a firm.
The asset that can be acquired by a firm may
be long term asset and short term asset.
12. Investment Decision
Decision with regard to long term assets is
called capital budgeting.
Decision with regard to short term or current
assets is called working capital management.
13. Capital Budgeting
Capital budgeting relates to selection of an
asset or investment proposal which would yield
benefit in future. It involves three elements.
The measurement of the worth of the proposal
14. Capital Budgeting
Evaluation of the investment proposal in terms
of risk associated with it and
Evaluation of the worth of the investment
proposal against certain norms or standard. The
standard is broadly known as cost of capital
15. Financing Decision
Determination of the proportion of equity and
dept is the main issue in financing decision.
Once the best combination of debt and equity is
determined, the next step is raising appropriate
amount through available sources.
16. Working Capital
Management
Working capital management or current asset
management is an important part of investment
decision.
Proper management of working capital ensures
firm’s liquidity and solvency.
A conflict exists between profitability and liquidity
while managing current asset.
17. Working Capital
Management
If a firm does not invest sufficient funds in
current assets it may become illiquid and may
not meet its current obligations.
The financial manager should develop proper
techniques of managing current assets so that
neither insufficient nor unnecessary funds are
invested in current assets.
If the current asset are large, the firm would
lose its profitability and liquidity.
18. Management of Working
Capital
The management of working capital has two
aspects.
- Efficient management of individual current
asset such as cash, receivable and inventory.
- Overview of working capital management and
19. Financing Decision
Financing decision is concerned with the
financing mix or capital structure.
The mix of debt and equity is known as capital
structure.
20. Dividend Decision
A firm distribute all profits or retain them or
distribute a portion and retain the balance with
it.
Which course should be allowed? The decision
depends upon the preference of the
shareholders and investment opportunities
available to the firm.
21. Dividend Decision
Dividend decision has a strong influence on the
market prize of the share.
So the dividend policy is to be determined in
terms of its impact on shareholder’s value.
The optimum dividend policy is one which
maximizes the value of shares and wealth of
the shareholders.
22. Dividend Decision
The financial manager should determine the
optimum pay out ratio I.e. the proportions of net
profit to be paid out to the shareholders.
The above three decisions are inter related. To
have an optimum financial decision the three
should be taken jointly.
23. Objectives of financial
management
The term ‘objective’ refers to a goal or decision
for taking financial decisions.
Profit maximisation
Wealth maximisation
24. Profit maximisation
The term profit maximisation is deep rooted in
the economic theory.
It is need that when firms pursue the policy of
maximising profits.
Society’s resources are efficiently utilised.
25. Profit maximisation
The firm should undertake those actions that
would profits and drop those actions that would
decrease profit.
The financial decisions should be oriented to the
maximisation of profits.
Profit provides the yardstick for measuring
performance of firms.
26. Profit maximisation
It makes allocation of resources to profitable
and desirable areas.
It also ensures maximum social welfare.
27. Wealth maximisation
Wealth maximisation or net present value
maximisation provides an appropriate and
operationally feasible decision criterion for
financial management decisions.
28. Sources of Finance
Capital required for a business can be classified
under two main categories, viz.,
- Fixed Capital, and
- Working Capital.
- every business needs funds for two purposes.
- for its establishment and to carry out its day-to-
day operations.
29. Sources of Finance
Long term funds are required to create production
facilities through purchase of fixed assets such as
- plant,
- machinery,
- land,
- building,
- furniture, etc.
30. Sources of Finance
- Investment in these asset represent that part of
firm’s capital which is blocked on permanent or
fixed basis and is called fixed capital.
Funds are also needed for short-term purposes
for the purchase of raw materials, payment of
wages and other day to day expenses, etc. These
funds are known as working capital.
31. Sources of Finance/Funds
In our present day economy, finance is defined
as the provision of money at the time when it is
required.
Every enterprise, whether big or medium or
small, needs finance to carry on its operations
and to achieve its targets.
32. Sources of Finance/Funds
In fact finance is so indispensable today that is
rightly said that it is the life blood of enterprise.
With out adequate finance, no enterprise can
possibly accomplish its objectives.
In every concern there are two methods of raising
finance, viz.,
- Raising of owned capital,
- Rising of borrowed capital
33. Sources of Finance/Funds
The financial requirements may be for a long term, medium term or short term.
Financial Requirements
Short-Term Medium-Term Long-Term
Bank Credit
Customer advances
Trade Credit
Issue of Debentures
Issue of Preference shares
Bank Loan
Public deposit / Fixed deposit
Loans from financial institutions
Issue of shares
Issue of Debentures
Ploughing back of
profits
Loan from
spec.financial
institutions
34. Issue of shares
The company’s owned capital is split into large
number of equal parts , such a part being called a
“share”.
The person holding the share as shareholder
and becomes part-owner of the company.
For this reason, the capital so raised is known
as “owned capital” and the shares are called
“ownership securities”.
35. Issue of shares
The share capital of the company is ideal for
meeting the long term requirements.
It need not be paid back to the shareholders
within the life time of the company.
The only exception is the sum raised by the
issue of redeemable preference shares.
36. Types of shares
A public company can issue two types of share.
Equity share
Preference share
37. Equity share
Equity share has number of special features
The dividend on these shares are paid after the
dividend on preference share has been paid.
The rate of dividend depends upon the amount
of profits available and the intention of
directors.
38. Equity share
The Equity shareholders have the chance of earning good
dividends in times of prosperity and run the risk of earning
nothing in times of adversity.
The equity shareholders have a residual claim
on the company’s asset in case of liquidation.
The company is controlled by the equity
shareholders and they are entitled to vote in
the meetings of the company.
39. Preference shares
Preference shares are those which carry preferential right
over other class of shares with regard to payment of
dividend and repayment of capital.
The rate of dividend on preference share is a
fixed one.