it is good exercise for examinationDeskripsi lengkap
it is good exercise for examination
Financial management , test bank, chapter8, RiskFull description
chapter 1Full description
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This is an assignment in my college.
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Financial Management
financial management notes as per MBA 2nd Sem.Full description
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This will be very helpful for Anna University MBA Examination. I Did M.B.A 2011-2013 at Jei Mathaajee College of Engineering (Affiliated to Anna University).Full description
Case Study Financial ManagementFull description
Solutions to chapter 2 financial management book
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| DEFINITION: ´ That business activity which is concerned with the acquisition and conservation of capital funds in meeting the financial needs and overall objectives of business enterprise.µ (Wheeler) According to Guthamann & Dougallr ´ Business finance can be broadly defined as the activity concerned with the planningr raisingr controlling and administering the funds used in the businessµ Meaning: Business finance is the process of raisingr providing and administering of all money/funds to be used in a business enterprise
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Financial management refers to that part of management activity which is concerned with the planning and controlling of the firm·s financial resources. IT deals with finding out various sources of raising funds for the firm and also using such funds in the most appropriate manner
| FM helps in · Financial planning & successful promotion of an enterprise · Acquisition of funds at minimum cost · Proper use & allocation of funds · Taking sound financial decisions · Improving profitability through financial control · Increasing the wealth of investors and the nation · Promoting and mobilising individual and corporate savings
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Estimating financial requirements (short term & long term)
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Deciding capital structure Selecting a source of finance Selecting a pattern of investment Proper cash management Implementing financial controls Proper use of surpluses
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mong-term asset mix or investment decision Capital-mix or financing decision Profit allocation or dividend decision Short-term asset mix or liquidity decision
Also referred to as Capital Budgeting Decisionr involves the decision of allocation of capital to long term assets that would yield benefits in the future. Important aspectsa) Evaluation of prospective profitability and b) Measurement of cut-off rate or required rate of return Evaluation should be made in terms of both risk and return Capital budgeting also involves replacement decisions
| Deciding- whenr where from and how to acquire funds to meet the investment needs. Central issue- determining the optimum capital structure (mix of debt & equity). Capital structure will be optimum when the market value of shares is maximised Proper balance has to be struck between risk & return Also considers factors such as controlr flexibilityr loan agreementsr legal aspects etc
Decide whether the firm should distribute all profitsr or retain themr or distribute a portion and retain the balance. The proportion of profits distributed ² dividend-payout ratio The proportion of profits retained ² retention ratio Optimum dividend policy ² maximises the market value of shares Dividend can be paid either in cash or in shares. [Bonus shares]
Investment in current assets or current asset management or working capital management Short term survival is a pre requisite for long term success mack of liquidity ² insolvency ( in extreme situations) Profitability-liquidity trade-off 2 basic ingredientsa) overview of working capital management as a whole b) Efficient management of individual current assets
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External Factors: a) State of economy b) Structure of capital & money markets c) Requirements of investors d) Government policy e) Taxation policy f) mending policy of financial institutions
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Nature and size of business Expected returnr cost and risk Composition of assets Structure of ownership Trend of earnings Age of the firm miquidity Position Working capital requirements Conditions of debt agreements
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Determining Financial needs Choosing the sources of funds Financial Analysis & Interpretation Cost-Volume Profit Analysis Capital Budgeting Working Capital Management Profit Planning and Control Dividend Policy
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Financial Forecasting & Planning Acquisition of funds Funds allocation Helping in valuation decisions Maintain proper liquidity Profit planning- operating decisions in the areas of pricingr costsr volume of output and the firm·s selection of product lines. Understanding capital markets
