Downloaded 118 times
Uploaded byvamsi krishna
Financial management PPT MBA
This document discusses various sources of finance for companies including short term sources like trade credits and long term sources like shares. It describes the different types of shares like equity shares and preference shares. Equity shares are the risk bearing capital of a company, while preference shares enjoy priority in dividend payments and capital repayment. Retained earnings are an important source of internal financing for companies as they help in capital accumulation, investments and meeting working capital needs. Internal financing provides advantages to both companies and shareholders.
More Related Content
Similar to Financial management PPT MBA
Financial management PPT MBA
- 1.
- 2. SOURCES OF FINANCE SHORTTERM LONG TERM TRADE CREDITS CREDIT FROM SUPPLIERS ADVANCE FROM DEALERS PURCHASE OF FIXED ASSET FUNDING EXPANSIONS DIVERSIFICATIONS
- 3. LOGO OWNED FUNDS BORROWEDFUNDS SHARES RETAINED EARNING LONG TERM FINANCE
- 4. SHARES • A SHAREHAS BEEN DEFINED BY THE INDIAN COMPANIES ACT, 1956 • SHARE MEANS SHARE IN THE SHARE CAPITAL OF THE COMPANY & INCLUDES STOCK EXCEPT WHERE A DISTINCTION BETWEEN STOCK & SHARE IS EXPRESSED OR IMPLIED. • THE LIABILITY OF THE SHAREHOLDER IS LIMITED TO THE EXTENT OF THE FACE VALUE OF THE SHARES.
- 5. A SHAREHOLDER- MEMBEROF THE COMPANY PRIVATE COMPANY PUBLIC COMPANY MINIMUM MAXIMUM 2 50 7 UNLIMITED NUMBERS OF MEMBERS (MEMBERSHIP ) IN CASE OF A COMPANY
- 6. AUTHORISED CAPITAL ISSUED CAPITALUNISSUED CAPITAL SUBSCRIBED CAPITAL UNSUBSCRIBED CAPITAL CALLED UP CAPITAL UNCALLED CAPITAL RESERVE CAPITAL AID UP CAPITAL CALLS IN ARREARS (UNPAID CAPITAL)
- 7.
- 8. EQUITY SHARES •RISK BEARINGCAPITAL •NO FIXED RATE OF DIVIDEND •RIGHT TO VOTE •OWNERS OF THE COMPANY
- 9. RIGHTS OF EQUITYSHAREHOLDERS •THE RIGHT TO RESIDUAL INCOME •RIGHT OF CONTROL •PRE-EMPTIVE RIGHT •RESIDUAL CLAIMANTS OVER ASSETS
- 10. ADVANTAGES OF EQUITYSHARES TO THE ISSUING COMPANY- •PERMANENT SOURCE OF CAPITAL •NO FIX DIVIDEND •CREDITWORTHYNESS OF THE COMPANY
- 11. DISADVANTAGES OF THEEQUITY SHARES TO THE ISSUING COMPANY- •NOT A TAX-DEDUCTIBLE EXPENSE •FLOATATION COST IS HIGHER •OVER CAPITALISATION •DILUTION OF CONTROL
- 12. ADVANTAGES OF EQUITYSHARES TO THE SHAREHOLERS- •HIGHLY PROFITABLE SHRES •OWNERS OF THE COMPANY •LIMITED LIABILITY
- 13. DISADVANTAGES OF EQUITYSHARES TO THE SHAREHOLERS- •RISK CAPITAL •CONTROL OVER THE MANAGEMENT •FLUCTUATION
- 14. PREFERENCE SHARES •PREFERENCE SHARESARE THOSE SHARES WHICH ENJOY PRIORITIES IN THE PAYMENT OF DIVIDEND AS WELL AS IN THE REPAYMENT OF THE CAPITAL •PREFERENCE SHAREHOLDERS ARE ENTITLED TO RECEIVE A FIXED RATE OF DIVIDEND BEFORE THE DIVIDEND IS PAID TO THE EQUITY SHARESHOLDERS.
- 15. TYPES OF PERFERENCESHARES 1. PARTICIPATING AND NON PARTICIPATING SHARES 2. REDEEMABLE AND IRREDEEMABLE SHARES 3. CUMULATIVE AND NON CUMULATIVE SHARES 4. CONVERTIBLE AND NON CONVERTIBLE SHARES
- 16. FEATURES OF PREFERENCESHARES- •HYBRID SECURITY •PREFERENCIAL RIGHTS •PREFERENCIAL RIGHT ON FIXED DIVIDENDS. •DEMAND UNPAID ARREARS • VOTING RIGHTS •CONVERSION OF SHARES •RIGHT TO SHARE SURPLUS PROFITS
- 17. ADVANTAGES OF OWNEDFUNDS •INDICATES THE OWNERS STAKE AND INTEREST •CUSHION FOR RAISING BORROWED FUNDS •PROPOTION •NO OBLIGATION •SAFETY TO THE LENDERS •RIGHT TO ACTIVE PARTICIPATION
- 18. RETAINED EARNINGS INSTEAD OFDISRTIBUTING THE ENTIRE PROFITS TO THE SHAREHOLERS, COMPANY RETAINS SOME PROFITS FOR THE PURPOSE OF- 1. ACCUMULATIONS OF EARNINGS 2. INVESTMENT IN FIXED ASSETS 3. TO MEET WORKING CAPITAL NEEDS
- 19. MERITS OF PLOUGHINGBACK OF PROFITS TO THE COMPANY- •ECONOMICAL •EFFICIENCY AND PRODUCTIVITY •CONFIDENCE OF SHAREHOLDERS •ENHANCES CREDITWORTHYNESS •LESS FINANCIAL RISK •REPAYMENTS OF DEBENTURES AND TERM LOANS
- 20. TO THE SHAREHOLDERS •APPRECIATIONIN SHARE VALUES •BONUS SHARES •REGULAR DIVIDENDS •SECURITY VALUE TO THE SOCIETY •INCREASES CAPITAL FORMATION •HELPS SPEEDY DEVELOPMENT •BENEFITS TO THE CONSUMERS •SOCIAL WELFARE ACTIVITIES
- 21. DETERMINANTS OF INTERNALFINANCING •TOTAL EARNING OF THE ENTERPRISE •TAXATION POLICY OF THE GOVERNMENT •DIVIDEND POLICY •GOVERNMENT ATITUDES AND CONTROL •OTHER FACTORS
- 22. MERITS OF INTERNALFINANCING ADVANTAGES RO THE COMPANY- •BEST AND CHEAPEST SOURCE OF FINANCE •STABLE DIVIDEND POLICY •INCREASE IN MORALE OF MANAGEMENT •SAFETY FROM TRADE CYCLES
- 23. ADVANTAGES TO THESHAREHOLDER •INCRAESE IN THE VALUE OF THE SHARE •INCREASE IN EQUITY •INCREASE IN THE COLLATERAL VALUE OF SHARES ADVANTAGES TO THE SOCIETY •CAPITAL FORMATION •INCRAESE IN SOCIAL WELFARE
- 24.