introduction of financial management and objective / function / scope of financial management and difference between traditional and modern approach

2. Business is an economic activity which includes manufacturing, purchase
and sales of goods and services with a objective to earn profit.
WHAT IS FIANANCIAL MANAGEMENT ?
FINANCIAL MANAGEMENT = FINANCE + MANAGEMENT
FINANCE
FINANCE INCLUDE THE
CASH ,FUNDS AND ALL
THE SOURCES AND
RESOURCES THREW
WHICH PERSON CAN
START AND RUN ANY
BUSINESS, PROJECT
AND ACTIVITY .
MANAGEMENT
MANAGEMENT IS A PROCESS
OF PLANNING , ORGANISING ,
CO-ORDINATION AND
CONTROL THE VARIOUS
ACTIVITY.
+
So that we can say that financial management is combination of two words
finance and management where finance mean fund/money and management is
getting things done by others……
In other word we can say financial management may be defined as acquisition of
funds at optimum cost with minimum financial risk……

3. DEFINITION OF FINANCIAL MANAGEMENT:-
-“FINANCIAL MANAGEMT IS A PROCESS OF
PLANNING , ORGANISATION, CO-ORDINATION ,
AND CONTROL TO FINANCE FUNCTION ”.
-”FINANCIAL MANAGEMENT STUDY THE
PROCUREMENT OF THE FUND AND OPTIMUM
UTILIZATION OF THE FUND SO THAT THE
VALUE/WEALTH OF THE FIRM MAXIMIZED”.
-“FINANCIAL MANAGEMENT IS A BRANCH OF
KNOWLEDGE WHICH INCLUDES THE SCIENTIFIC
AND SYSTEMATIC OF FINANCE FUNCTION” .

4. SCOPE OF FIANANCIAL MANAGEMENT
SCOPE UNDER TRADITIONAL APPROCH
-COLLECTION OF FUND
-ADMINISTRATION OF FUND
SCOPE OF MODERN APPROCH
-COLLECTION OF FUND
-ADMINISTRATION OF FUND
-UTILIZATION/ALLOCATION OF FUND

5. TRADITIONALAPPROCHMODERNAPPROCH
 ONE SIDED APPROCH
 IGNORE THE PROBLEM OF NON-
COPORATE ENTERPRICE
 IT CONCERNED TO THE PROBLEM OF
COLLECTING THE FINANCE FOR THE
SPECIAL EVENT
 DECISION WERE TAKEN ON THE BASIS
OF EXPERIENCE
 TWO SIDED APPROCH
 CONSIDER THE PROBLEM OF COPORATE
AS WELL AS NON COPORATE
ENTERPRICE
 IT FOCUS ON BOTH SHORT TERM AND
LONG TERM PROBLEM
 DECISION ARE TAKEN ON THE BASIS OF
SCIENTIFIC TECHINIQUE & ANALYSIS

6. OBJECTIVE OF FINANCIAL
MANAGEMENT
MACRO LEVEL APPROCH MICRO LEVEL APPROCH
TRADITIONAL
OBJECTIVE
(PROFIT
MAXIMIZATION)
MODERN OBJECTIVE
(WEALTH MAXIMIZATIO)
OTHER
OBJECTIV
E
BEHAVIOURIAL
OBJECTIVE OF
BUSINESS
MANAGIRIAL
OBJECTIVE OF
BUSINESS

7. FUNCTIONS OF FINANCIAL MANAGEMENT
TREASURER CONTROLLER
BANKING TRANSACTION
MANAGEMENT OF CASH
RECIEPT OF FINANCE
PLANNING OF FINANCE
MANAGEMENT OF
CREDIT
DISTRIBUTION OF
DIVIDEND
MANAGEMENT OF
PENSION
JOURNAL ACCOUNTING
PREPARE THE FINANCIAL
STATEMENT
PREPARE THE BUDGET
INTERNAL AUDIT
MNANGEMENT
ACCOUNTING AND
CONTROL
ADMINISTRATION OF TAX
ADMINISTRATION OF
INFORMATION

8. ADVANTAGE OF FINANCIAL
MANAGEMENT
BASIS OF
SUCCESS OF
THE
ENTERPRISE
OPTIMUN
ALLOCATION
AND
UTILIZATION OF
RESOURCESS
USEFUL FOR
BUSINESS
MANAGERS
USEFUL FOR
SHAREHOLDERS
/INVVESTORS
USEFUL FOR
FINANCIAL
INSTITUTIONS

9. DISADVANTAGE OF FINANCIAL
MANAGEMENT
BASED ON
FINANCIAL
RECORDS
LACK OF
KNOWLEDGE
OF RELATED
SUBJECTS
LACK OF
OBJECTIVITY
DEVELOPING
SUBJECT
EXPENSIVE

10. FINANCE FUNCTIONS
FINANCING
DECISION
INVESTING
DECISION
DIVIDEND
DECISION
COST OF
CAPITAL
CAPITALIZATIO
N
CAPITAL
STRUCTURE
LEVERAGE
DIVIDEND
POLICY
DECISIONLONG TERM
INVESTMENT
SHORT TERM
INVESTMENT
 CAPITAL
BUDGETING
 WORKING
CAPITAL
MANAGEMENT

11. SOURCE OF FINANCE / FUND
SHORT
TERM
FINANCE
MEDIUM
TERM
FINANCE
LONG
TERM
FINANCE
TRADE CREDIT
SHORT TERM
BANK FINANCE
CREDIT

12. ROLE OF FINANCE /FINANCIAL MANAGER
DETERMINATION OF FINANCIAL OBJECTIVES ,
FINANCIAL POLICES AND OPERATIONAL
ESTIMATION OF THE CAPITAL REQUIREMENTS OF THE
BUSINESS
DESIGNING THE CAPITAL STRUCTURE
DETERMINATION OF THE PROPER SOURCES OF
FINANCE
INVESTMENT DECISION
ENSURI NG SUPPLY OF REQUIRED FUNDS
CONTROLLING THE USE OF FUNDS
PROFIT PLANNING
BUSINESS FORECASTING
MANAGEMENT OF WORKING CAPITAL
HELPING IN VALUATION DECISIONS

13. THANK YOU