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Finance information system

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Finance information system

  1. 1. Prepared by Suby A John 1
  2. 2. Introduction to FIS • Traditionally procurement of funds • Modern terms it is associated with procurement till allocation of funds to maximize profits • In short Financial management is reducing cost of capital and maximizing the profits 2
  3. 3. Procurement of funds • Long Term Sources – Debentures, Bond, Equity etc. • Short Term Sources – Bank Borrowings 3
  4. 4. Requirement of proper allocation of funds • Done in both long term assets and short term assets • Proper utilization leads to proper allocation of funds – In return yields maximum profits • To perform these functions financial manager has to perform certain activities – Cash Management – Investment Management – Capital Budgeting – Financial Planning 4
  5. 5. Financial Management Cash Management Investment Management Capital Budgeting Financial Planning 5
  6. 6. Cash Management • Important task of finance manger – Forecasts the requirements of cash – And procure the funds required • There should be neither shortage nor Idle cash left – Shortage damages credit worthiness – Idle shows the improper utilization of funds 6
  7. 7. Cash Management System • Collects information on all cash receipts and payments – Periodical basis – On line information 7
  8. 8. Investment Management • Proportion of different securities to be kept in the business. • Depending upon the policies short term investments may be done • Portfolio management softwares to retrive the information in this regard • Financial managers develops an optimum portfolio – Minimises the risk and maximies the profits 8
  9. 9. Capital Budgeting • Invetsments decisions in capital expenditure • Have long term perspective • Fin manager access the various projects with varied techniques • Computerized Capital budgeting system use heavy spread sheet model – Analysis of risk, PV analysis, determining optimum mix of capital 9
  10. 10. Financial Planning • Concerned not only with how best to finance new asset but also with best overall mix of financing • Fin analysts use electronic spread sheet and financial planning software's to evaluate the projected financial performance of the business • Uses financial forecasting concerning – Economic situation interest rates, finance availability 10
  11. 11. FIS @ a glance • Financial information system • Sources of procurement of funds • Allocation of funds – Cash Management – Investment Management – Capital Budgeting – Financial Planning 11
  12. 12. Thank you :) 12

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