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Meaning
& definition Objectives of financial management Function of financial management Evolution of financial management Organization of financial management Financial analysis, planning & control
Finance: finance is provision of funds,(when required). Financial Management concerned with decision making is comes under the three decisions. Financial Decision Finance Investment Dividend Financial management = Raising of funds + proper utilization of funds.
Finance means the finance the terms of finance derived from Latin word Finis finance is the provision of funds [when required] is called as finance. Financial management is concerned with decision making is called as financial management .(finance decision making, investment decision making, dividend decision making)
Financial management comes under the two objectives there are: Profit maximization Wealth maximization
Estimating
the requirement of funds Procuments of funds Effective utilization of funds Dividend decision
Approaches:
Description & institution Dominance view point: Outsiders Investment Lenders etc Core of FM: Investments Procedures Legal aspect
Greater emphasis was given to day-to-day problem(funds analysis, planning & control) Focus shifted to working capital management
a. b. c. d. e. f.
g.
h. i.
Focus : Rational matching of funds to maximize the wealth of the shareholders. Approach :More analytical and quantitative Development : Capital budgeting Assets pricing theory Capital structure theory Efficient market theory Option pricing theory Agency theory Valuation of model Dividend policy Working capital management
Board of directors
Managing direction Production dept HR Finance Treasury Cash mgnt Credit Capital budgeting Fund raising Portfolio mgr
Marketing
Controller
Financial a/c mgr Cost a/c mgr Tax mgr Data process mgr.
Internal auditor
Assessing
the firms Forecasting & planning the financial future of the firm Estimating the financing needs of the firm Appropriate systems of control instituting
Financial
types
Control:
Fund
Capitalization Leverage