Location via proxy:   [ UP ]  
[Report a bug]   [Manage cookies]                
Scribd Logo
Upload

Welcome to Scribd!

  • 59 views

    Financial Management

    Uploaded by

    April Caringal
    Financial management involves planning, organizing, directing, and controlling the financial activities of a business such as acquiring and allocating funds. The key elements include making investment decisions for fixed and current assets, financial decisions around raising funds, and dividend decisions regarding profit distribution. Objectives of financial management are to ensure adequate and regular funding, optimal fund utilization, shareholder returns, investment safety, and a balanced capital structure. Functions include estimating capital needs, determining capital composition, choosing funding sources, investing funds, disposing surplus profits, managing cash flows, and exercising financial controls.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd

    Financial Management

    Uploaded by

    April Caringal
    59 views18 pages
    Financial management involves planning, organizing, directing, and controlling the financial activities of a business such as acquiring and allocating funds. The key elements include making investment decisions for fixed and current assets, financial decisions around raising funds, and dividend decisions regarding profit distribution. Objectives of financial management are to ensure adequate and regular funding, optimal fund utilization, shareholder returns, investment safety, and a balanced capital structure. Functions include estimating capital needs, determining capital composition, choosing funding sources, investing funds, disposing surplus profits, managing cash flows, and exercising financial controls.

    Original Title

    Financial-management.pptx

    Copyright

    © © All Rights Reserved

    Available Formats

    PPTX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Financial management involves planning, organizing, directing, and controlling the financial activities of a business such as acquiring and allocating funds. The key elements include making investment decisions for fixed and current assets, financial decisions around raising funds, and dividend decisions regarding profit distribution. Objectives of financial management are to ensure adequate and regular funding, optimal fund utilization, shareholder returns, investment safety, and a balanced capital structure. Functions include estimating capital needs, determining capital composition, choosing funding sources, investing funds, disposing surplus profits, managing cash flows, and exercising financial controls.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    59 views18 pages

    Financial Management

    Uploaded by

    April Caringal
    Financial management involves planning, organizing, directing, and controlling the financial activities of a business such as acquiring and allocating funds. The key elements include making investment decisions for fixed and current assets, financial decisions around raising funds, and dividend decisions regarding profit distribution. Objectives of financial management are to ensure adequate and regular funding, optimal fund utilization, shareholder returns, investment safety, and a balanced capital structure. Functions include estimating capital needs, determining capital composition, choosing funding sources, investing funds, disposing surplus profits, managing cash flows, and exercising financial controls.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 18

    Financial management

    What is financial management?


    Financial Management means planning,
    organizing, directing and controlling the
    financial activities such as procurement and
    utilization of funds of the enterprise. It means
    applying general management principles to
    financial resources of the enterprise.
    Scope and elements
    Investment decisions includes investment in
    fixed assets (called as capital budgeting).
    Investment in current assets are also a part of
    investment decisions called as working capital
    decisions.
    Scope and elements
    Financial decisions - They relate to the raising of
    finance from various resources which will
    depend upon decision on type of source,
    period of financing, cost of financing and the
    returns thereby.
    Scope and elements
    Dividend decision - The finance manager has to
    take decision with regards to the net profit
    distribution. Net profits are generally divided
    into two:
    Dividend decision
    • Dividend for shareholders- Dividend and the
    rate of it has to be decided.
    • Retained profits- Amount of retained profits
    has to be finalized which will depend upon
    expansion and diversification plans of the
    enterprise.
    Objectives of financial management

    To ensure regular and adequate supply of funds


    to the concern.
    Objectives of financial management

    To ensure adequate returns to the shareholders


    which will depend upon the earning capacity,
    market price of the share, expectations of the
    shareholders.
    Objectives of financial management

    To ensure optimum funds utilization. Once the


    funds are procured, they should be utilized in
    maximum possible way at least cost.
    Objectives of financial management

    To ensure safety on investment, i.e, funds should


    be invested in safe ventures so that adequate
    rate of return can be achieved.
    Objectives of financial management

    To plan a sound capital structure-There should


    be sound and fair composition of capital so
    that a balance is maintained between debt
    and equity capital.
    Functions of financial management
    Estimation of capital requirements: A finance
    manager has to make estimation with regards
    to capital requirements of the company. This
    will depend upon expected costs and profits
    and future programmes and policies of a
    concern. Estimations have to be made in an
    adequate manner which increases earning
    capacity of enterprise.
    Functions of financial management
    Determination of capital composition: Once the
    estimation have been made, the capital
    structure have to be decided. This involves
    short- term and long- term debt equity
    analysis. This will depend upon the proportion
    of equity capital a company is possessing and
    additional funds which have to be raised from
    outside parties
    Functions of financial management
    • Choice of sources of funds: For additional
    funds to be procured, a company has many
    choices like-Issue of shares and debentures
    • Loans to be taken from banks and financial
    institutions
    • Public deposits to be drawn like in form of
    bonds.
    Objectives of financial management

    Investment of funds: The finance manager has


    to decide to allocate funds into profitable
    ventures so that there is safety on investment
    and regular returns is possible.
    Objectives of financial management

    • Disposal of surplus: The net profits decision


    have to be made by the finance manager. This
    can be done in two ways:Dividend declaration
    - It includes identifying the rate of dividends
    and other benefits like bonus.
    • Retained profits - The volume has to be
    decided which will depend upon expansional,
    innovational, diversification plans of the
    company.
    Objectives of financial management

    Management of cash: Finance manager has to


    make decisions with regards to cash
    management. Cash is required for many
    purposes like payment of wages and salaries,
    payment of electricity and water bills,
    payment to creditors, meeting current
    liabilities, maintainance of enough stock,
    purchase of raw materials, etc.
    Objectives of financial management

    Financial controls: The finance manager has not


    only to plan, procure and utilize the funds but
    he also has to exercise control over finances.
    This can be done through many techniques
    like ratio analysis, financial forecasting, cost
    and profit control, etc.

    You might also like