Hi all! This is my maiden presentation that i have uploaded....on Financial Management...for the ease of students without an accounting background...

1.  Management of flow of funds
 Sourcing of funds
 Effective utilization of funds
 Coordination with other factors of
production
 Financial and managerial decision
making
FINANCIAL MANAGEMENT - Meaning

2. There are 2 Approaches to FM
 TRADITIONAL APPROACH
 MODERN APPROACH
SCOPE OF FINANCIAL MANAGEMENT

3.  Outsider-looking in approach
 No internal Financial decision making
 Consideration for mergers, acquisitions
and re-organization
 Concept of working capital ignored
TRADITIONAL APPROACH

4.  Effective funds utilization
 Concentration only on
Investment
Financing
Dividend decisions
Capital Structure
Risk Management
Profitability Management
MODERN APPROACH

5.  Profit Maximization
 Wealth Maximization
OBJECTIVES OF FM

6. Measures the business
efficiency
Resources allocation and
utilization
Calculates Return on
Investment
Motivates business growth
Social and economic welfare
improved
PROFIT MAXIMIZATION

7. Vague
Ignores Time Value of Money
Ignores Risk Factor
CRITICISMS

8.  Increase in Net Present Worth
 Finance Decision
 Investment Decision
 Dividend Decision

9.  Return Maximization
 Supports decision making
 Risk management
 Efficient resource management
 Compliance with rules and regulations
Other Objectives

10.  Forecasting financial requirements
 Financing Decisions – equity and debt
 Investment Decisions – short and long
term
 Dividend Decision – Ploughing back of
profits
- Re-investment
- Declaration of dividends
Supply of funds to all departments
FUNCTIONS OF A FINANCE MANAGER

11.  Evaluating financial performance
 Compliance to relevant Acts
 Close observation of stock
exchange quotations
Identifying the liquidity, risk,
profitability and returns of the
investment
Functions – contd…

12.  Optimizing output based on inputs of funds
 Ascertainment of financial performance of
the firm
 Coordinates the various functions in an
organization
 Aids decision making
 Mobilises corporate and individual savings
 Helps in profit planning, cost control,
inventory management
IMPORTANCE OF FINANCIAL
MANAGEMENT