``
International BusinessInternational Business
and Financeand Finance
 Introduction of finance.
 Role of FM/ CFO.
 Age (History) of Globalization.
 What Does Globalization Mean for
You?
 GLOBALIZATION:
DIMENSIONS….
 Who Benefits from Globalization?
 Globalization and the Environment?
 Challenges of Globalization?
 Global business in the 2 1st
centuries?.
 What is international Business? Why
do firms expand internationally?
 International trade theories and
Applications?
 Foreign direct investment. 22
 International business strategy. Entry strategy and
strategic alliance .
 Global alliance joint ventures and mergers &
acquisition.
 International financial management & Corporate
finance.
 Risk
 Determination of exchange rate.
 International trade and finance ( ICC)
 Emerging in international business. Global internet
& E. Commerce)
 (Ethics & Corruption in the global market place )
 Books Recommended:
 International Business Environments and
Operations……. by Daniels.
 International business…….. by Justin Paul.
 International finance ……..by . Maurice D . Levi.
 International Business ……by. Ehud Menipaz &
Amit Menipaz
 International business ……..by Oded Shenkar /
Yadong Luc.
Positive ThinkingPositive Thinking
HCC… University of the
Punjab
4
LETTER WRITTEN
IN THE YEAR 2070
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wWwwwww w w ww w
wwwwwwww wwwwwww w w ww
www ww w www wWwwwww w w
ww w wwwwwwww wwwwwww w
w w wwwww ww w w w www w
Wwwwww w w ww w wwwwwwwwArticle published in the magazine
"Crónicas de los Tiempos“, in April 2002.
Introduction
to
Finance
HCC… University of the PunjabHCC… University of the Punjab
66
Definition
“Business Finance is the flow of
capital and credit
that makes business possible.”
HCC… University of the PunjabHCC… University of the Punjab
77
So Finance is the application of theSo Finance is the application of the
principles ofprinciples of financial economicsfinancial economics to anto an
inter-related set of monetary problems.inter-related set of monetary problems.
Its aim is in the optimal use of financialIts aim is in the optimal use of financial
instruments. In the case of a company,instruments. In the case of a company,
this generally involvesthis generally involves balancingbalancing
risk and profitabilityrisk and profitability …!!!!!…!!!!!
Cont….
HCC… University of the PunjabHCC… University of the Punjab
88
The success and failure of a business in privateThe success and failure of a business in private
sector is Linked with Financesector is Linked with Finance
Importance
Business with out Finance Just
like a Fish with out Water
HCC… University of the PunjabHCC… University of the Punjab
99
Purchase of
Assets
Maintenance of
Assets
Purchase of
Goods
Business
Expansion
Change in
Business
Communication
Daily Expenses
Insurance
Income
Liquidity
Position
Professional
Services
Pension Fund
Taxation
Technology
Usage of Finance
HCC… University of theHCC… University of the
PunjabPunjab
Superior UniversitySuperior University 1010
SOURCES OF FINANCE
Superior UniversitySuperior University 1111
Blessings of Allah
& Parents Prayers
Key Factors of
Successful Life
Positive thinking
Struggle
Attitude
1212
Sources of Business Finance
Equity
Financing
Debt
Financing
DEBT FINANCING
Debt finance consists of borrowing funds,
which are obtained at interest from the financial
institutions and money lenders etc by agreement.
This source of finance is achieved for short term,
medium term and long term. The repayment of this
loan is made on installments basis, if it is for more
than one year.
EQUITY FINANCING
The finance which is supplied by the owner from
their personal resources is known as Equity
Finance or Owner’s Finance. The owned capital
provides sound financial base to the capital
structure of company.
HCC… University of theHCC… University of the
PunjabPunjab
1313
Banks Institutions
Commercial
Banks
Investment
Banks
Non Banking
Institutions
Investment
Corporations
Venture
Capitalist
Angel
investors
Insurance
Companies
Stock
Brokers
Financial Institutions
HCC… University of theHCC… University of the
PunjabPunjab
1414
Decisions in Business Finance
Investment
Decision
Financing
Decision
Asset
Management
Decision
HCC… University of theHCC… University of the
PunjabPunjab
1515
Decisions in Business Finance
Investment
Decision
Financing
Decision
Asset
Management
Decision
It is the most important, begins with a determination of
the total amount of Assets needed to be held by the firm.
For example how much of the firm total assets should
be devoted to cash or to inventory.
Assets that can no longer be economically justified may
need to be reduced, eliminate or replaced.
Here the Financial Manager is concerned with
the mark Up. (Financing Mix) and the dividend policy.
Once assets have been acquired and appropriate
financing provided, (particularly Current Assets) these
assets must still be managed efficiently and effectively.
HCC… University of theHCC… University of the
PunjabPunjab
1616
He or She Stand Between the firms operations and the
Financial (or Capital) markets.
Under mention Diagram Shows that flow of cash from
Investors to the firm and back to investors Again.
Firm’s
operations
(a bundle
of real assets)
Financial
manager
Financial markets
(investors holding
Financial
Assets)
(2)
(3)
(4b)
(4a)
(1)
1.Cash raised by selling financial assets to investors
2. Cash invested in the firm’s operations and used to purchase real assets.
3.Cash generated by the firm’s operations. (cash Inflow
more than Repay the initial investment)
4. Cash reinvested. (4b): Cash returned to investors.
1717
Diagram takes us back to the financial manager’sDiagram takes us back to the financial manager’s
two basic questions? First,two basic questions? First, what real assets shouldwhat real assets should
the firm invest in?the firm invest in? Second,Second, How should the cash forHow should the cash for
the investment be raised?the investment be raised?
The answer to the first question in theThe answer to the first question in the firm’sfirm’s
investment,investment, oror capital budgeting decisioncapital budgeting decision..
The answer to the second is theThe answer to the second is the
firm’s financial decision.firm’s financial decision.
1818
No doubt the goal and objective
of a business, firm and
international finance is how to
utilized resources efficiently
and effectively at optimum
level to get maximum profit.
But it does not mean that
management should
ignore CSR. …
Goal of
International Finance…
HCC… University of theHCC… University of the
PunjabPunjab
1919
Finance has no emotions.
Focus on Decision Making.
Wisely deal with Stock holders,
Stakeholders and government
agencies.
Utilize your resources at
optimum Level.
Maximization of Profits.
Conclusion
HCC… University of theHCC… University of the
PunjabPunjab
2020
BOARD OF
DIRECTORS
PRESIDENT
(CEO)
VICE PRESIDENT
Operations
VICE PRESIDENT
Finance
(Chief Financial Officer)
VICE PRESIDENT
Marketing
VICE PRESIDENT
Human Resource
Organizational Chart
HCC… University of theHCC… University of the
PunjabPunjab
2121
Vice President Finance OR
(Chief Financial Officer)
TREARSURE
CONTROLLER AUDIT
VP
HCC… University of theHCC… University of the
PunjabPunjab
2222
CFO / VP ( finance)
Treasurer
a) Capital Budgeting.
b) Working Capital Management
c) Commercial and Banking
investment relationship.
d) Credit Management.
e) Dividend Disbursement.
f) Financial Analysis And Planning.
g) Investor Relations.
h) Pension Management.
i) Insurance Management.
j) Tax Analysis and
Planning.
Controller
a) Cost Accounting.
b) Cost Management.
c) Data Processing.
d) Journal (Payroll, AR, AP).
e) Government reporting.
f) Internal Control.
g) Preparing Financial
Statements.
h) Preparing Budgets .
i) Preparing Forecasts.
2323
Now the question is for a finance
manager?
(A Man of Wisdom)
How to get finance?
Where to get finance?
At what cost?
HCC… University of theHCC… University of the
PunjabPunjab
Questions
Introduction to Finance

Introduction to Finance

  • 1.
  • 2.
    International BusinessInternational Business andFinanceand Finance  Introduction of finance.  Role of FM/ CFO.  Age (History) of Globalization.  What Does Globalization Mean for You?  GLOBALIZATION: DIMENSIONS….  Who Benefits from Globalization?  Globalization and the Environment?  Challenges of Globalization?  Global business in the 2 1st centuries?.  What is international Business? Why do firms expand internationally?  International trade theories and Applications?  Foreign direct investment. 22  International business strategy. Entry strategy and strategic alliance .  Global alliance joint ventures and mergers & acquisition.  International financial management & Corporate finance.  Risk  Determination of exchange rate.  International trade and finance ( ICC)  Emerging in international business. Global internet & E. Commerce)  (Ethics & Corruption in the global market place )  Books Recommended:  International Business Environments and Operations……. by Daniels.  International business…….. by Justin Paul.  International finance ……..by . Maurice D . Levi.  International Business ……by. Ehud Menipaz & Amit Menipaz  International business ……..by Oded Shenkar / Yadong Luc.
  • 3.
  • 4.
    HCC… University ofthe Punjab 4 LETTER WRITTEN IN THE YEAR 2070 www ww w www w Wwwwww w w ww w wwwwwwww wwwwwww w w w wwwww ww w w w www wWwwwww w w ww w wwwwwwww wwwwwww w w ww www ww w www wWwwwww w w ww w wwwwwwww wwwwwww w w w wwwww ww w w w www w Wwwwww w w ww w wwwwwwwwWwwwww w w ww w wwwwwwww wwwwwww w w w wwwww ww w w w www wWwwwww w w ww w wwwwwwww wwwwwww w w ww www ww w www wWwwwww w w ww w wwwwwwww wwwwwww w w w wwwww ww w w w www w Wwwwww w w ww w wwwwwwwwArticle published in the magazine "Crónicas de los Tiempos“, in April 2002.
  • 5.
    Introduction to Finance HCC… University ofthe PunjabHCC… University of the Punjab
  • 6.
    66 Definition “Business Finance isthe flow of capital and credit that makes business possible.” HCC… University of the PunjabHCC… University of the Punjab
  • 7.
    77 So Finance isthe application of theSo Finance is the application of the principles ofprinciples of financial economicsfinancial economics to anto an inter-related set of monetary problems.inter-related set of monetary problems. Its aim is in the optimal use of financialIts aim is in the optimal use of financial instruments. In the case of a company,instruments. In the case of a company, this generally involvesthis generally involves balancingbalancing risk and profitabilityrisk and profitability …!!!!!…!!!!! Cont…. HCC… University of the PunjabHCC… University of the Punjab
  • 8.
    88 The success andfailure of a business in privateThe success and failure of a business in private sector is Linked with Financesector is Linked with Finance Importance Business with out Finance Just like a Fish with out Water HCC… University of the PunjabHCC… University of the Punjab
  • 9.
    99 Purchase of Assets Maintenance of Assets Purchaseof Goods Business Expansion Change in Business Communication Daily Expenses Insurance Income Liquidity Position Professional Services Pension Fund Taxation Technology Usage of Finance HCC… University of theHCC… University of the PunjabPunjab
  • 10.
  • 11.
    Superior UniversitySuperior University1111 Blessings of Allah & Parents Prayers Key Factors of Successful Life Positive thinking Struggle Attitude
  • 12.
    1212 Sources of BusinessFinance Equity Financing Debt Financing DEBT FINANCING Debt finance consists of borrowing funds, which are obtained at interest from the financial institutions and money lenders etc by agreement. This source of finance is achieved for short term, medium term and long term. The repayment of this loan is made on installments basis, if it is for more than one year. EQUITY FINANCING The finance which is supplied by the owner from their personal resources is known as Equity Finance or Owner’s Finance. The owned capital provides sound financial base to the capital structure of company. HCC… University of theHCC… University of the PunjabPunjab
  • 13.
  • 14.
    1414 Decisions in BusinessFinance Investment Decision Financing Decision Asset Management Decision HCC… University of theHCC… University of the PunjabPunjab
  • 15.
    1515 Decisions in BusinessFinance Investment Decision Financing Decision Asset Management Decision It is the most important, begins with a determination of the total amount of Assets needed to be held by the firm. For example how much of the firm total assets should be devoted to cash or to inventory. Assets that can no longer be economically justified may need to be reduced, eliminate or replaced. Here the Financial Manager is concerned with the mark Up. (Financing Mix) and the dividend policy. Once assets have been acquired and appropriate financing provided, (particularly Current Assets) these assets must still be managed efficiently and effectively. HCC… University of theHCC… University of the PunjabPunjab
  • 16.
    1616 He or SheStand Between the firms operations and the Financial (or Capital) markets. Under mention Diagram Shows that flow of cash from Investors to the firm and back to investors Again. Firm’s operations (a bundle of real assets) Financial manager Financial markets (investors holding Financial Assets) (2) (3) (4b) (4a) (1) 1.Cash raised by selling financial assets to investors 2. Cash invested in the firm’s operations and used to purchase real assets. 3.Cash generated by the firm’s operations. (cash Inflow more than Repay the initial investment) 4. Cash reinvested. (4b): Cash returned to investors.
  • 17.
    1717 Diagram takes usback to the financial manager’sDiagram takes us back to the financial manager’s two basic questions? First,two basic questions? First, what real assets shouldwhat real assets should the firm invest in?the firm invest in? Second,Second, How should the cash forHow should the cash for the investment be raised?the investment be raised? The answer to the first question in theThe answer to the first question in the firm’sfirm’s investment,investment, oror capital budgeting decisioncapital budgeting decision.. The answer to the second is theThe answer to the second is the firm’s financial decision.firm’s financial decision.
  • 18.
    1818 No doubt thegoal and objective of a business, firm and international finance is how to utilized resources efficiently and effectively at optimum level to get maximum profit. But it does not mean that management should ignore CSR. … Goal of International Finance… HCC… University of theHCC… University of the PunjabPunjab
  • 19.
    1919 Finance has noemotions. Focus on Decision Making. Wisely deal with Stock holders, Stakeholders and government agencies. Utilize your resources at optimum Level. Maximization of Profits. Conclusion HCC… University of theHCC… University of the PunjabPunjab
  • 20.
    2020 BOARD OF DIRECTORS PRESIDENT (CEO) VICE PRESIDENT Operations VICEPRESIDENT Finance (Chief Financial Officer) VICE PRESIDENT Marketing VICE PRESIDENT Human Resource Organizational Chart HCC… University of theHCC… University of the PunjabPunjab
  • 21.
    2121 Vice President FinanceOR (Chief Financial Officer) TREARSURE CONTROLLER AUDIT VP HCC… University of theHCC… University of the PunjabPunjab
  • 22.
    2222 CFO / VP( finance) Treasurer a) Capital Budgeting. b) Working Capital Management c) Commercial and Banking investment relationship. d) Credit Management. e) Dividend Disbursement. f) Financial Analysis And Planning. g) Investor Relations. h) Pension Management. i) Insurance Management. j) Tax Analysis and Planning. Controller a) Cost Accounting. b) Cost Management. c) Data Processing. d) Journal (Payroll, AR, AP). e) Government reporting. f) Internal Control. g) Preparing Financial Statements. h) Preparing Budgets . i) Preparing Forecasts.
  • 23.
    2323 Now the questionis for a finance manager? (A Man of Wisdom) How to get finance? Where to get finance? At what cost? HCC… University of theHCC… University of the PunjabPunjab
  • 24.