Introduction to Financial

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Nov 10, 2013 (3 years and 8 months ago)

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Introduction to Financial
management

Module 2

Nimit

Ganatra

Asst Professor

Sanjaybhai

Rajguru

college of
Engineering


Content


Meaning and scope of finance


Finance functions


financial management and roles of Finance
manager


Objectives of FM

Meaning of Finance



Finance is an art and science of managing
money


Finance is an art of managing wealth

Scope of financial management



F.M is the use of economic resources namely
capital funds


It is concerned with managerial decisions that
results in short term and long term credits for
them


F.M deals with procurement of fund and
utilizing in the business

scope

Utilization

Procurement of
finance(
eg

equity)

Procurement of funds


In traditional approach the scope of FM was
limited to procurement of the funds


This approach was during 1920s

1930s till
1950s


Fund can be raised through domestic market
or abroad


FDI and FII foreign ( foreign direct investment
foreign institutional investors)

Utilization of funds


It is crucial to employ the funds properly and
profitably


Modern approach to FM is more conceptual
and has sound analytical framework
compared to traditional approach


Mordern

FM is more integrated in sense that
it covers both aspects of FM procurement and
allocation

Finance function

Managerial
finance function

Continue finance
functions

Managerial Finance function

Investment
decision

Finance
decision

Dividend
decision

Routine function include

Safeguarding policies and valuable documents

Keeping record of financial
transations

Supervision of cash receipts

Safe guarding cash balance

Other functions


Finance planning


Determining capital structure


Finance control


Finance decision making


Procurement of funds


Utilization of funds


Increasing productivity of fund


Conserve the fund


To plan and evaluate


Distribution of surplus


Management of cash


Financial management and role of
finance manager


Meaning



financial management is generally defined as
those activities that create or preserve the
economic value of asset of an individual small
business of corporation


Financial management comes down to
makin

sound financial decision


FM is concerned with creation of economic value
or wealth

Categories of Finance

Capital budgeting

(Long term
investment)

Capital Structure

( Equity debt..)

Working capital
management(Day
to day cash
mgmt)

Objectives or role of Financial manager

Profit
maximization

Wealth
maximization

Objectives of Financial management


Raising of funds


Allocation of funds


Proper investment decision


Maximization of wealth


Earning reasonable profits


Co
-
ordination


Preservation of capital funds


Thank you