Conceptual Framework Of Financial Management-B.V.Raghunandan
- 1. Financial ManagementConceptual Framework-B.V.Raghunandan, SVS College, Bantwal
- 2. Introduction to FinanceMeaning & Definition: FM is “concerned with the efficient use of an important economic resource viz., capital funds” - Ezra Solomon in ‘Theory of Financial Management’
- 3. Definition.. ContinuedFM is concerned with, ”the managerial decisions that result in the acquisition and financing of long-term and short-term credits for the firm. As such, it deals with the situations that require the selection of specific assets (or combination of assets), the selection of specific liability (or combination of liabilities) as well as the problem of size and growth of an enterprise” -Phillipatus
- 4. Scope of Financial ManagementScope UNDER Traditional Approach -Raising Funds -External Reporting (Accounting Function) -Institutions & Instruments
- 5. Scope Under Modern ApproachFinancing Decisions: Estimation of Fund Requirement, Procurement of Fund, Planning the Capital Structure, Negotiating with Funding AgenciesInvestment Decisions: Cash Management, Working Capital Management, Capital Budgeting, Portfolio Management, Risk Management, Evaluation of PerformanceDividend Policy Decisions: Profit Allocation and Framing Dividend policies
- 6. Objectives of Financial ManagementProfit Maximisation: Need for Profit and Criticisms in the form of Ignorance of Time Value of Money, Vagueness, Ignoring Risk and Uncertainties and the role of GrowthWealth Maximisation: Gross Present Value, Net Present Value and WealthImparting Sufficient LiquidityAdding to Shareholder ValueCorporate Governance
- 7. Changing Role of Finance ManagersPerforming Financial Analysis & PlanningFinancial RestructuringPortfolio ManagementDesigning Innovative InstrumentsEnhancing Shareholders' WealthLegal ComplianceMonitoring Share Price MovementSearching for Investment OpportunitiesFacilitating Organic GrowthEnabling Inorganic Growth
- 8. Organisation of Finance Function
- 9. Functions of TreasurerRaising FinanceBanking relationshipInvestor relationshipShort Term FinancingCash managementCredit AdministrationInvestmentsInsurance
- 10. Functions of ControllerFinancial AccountingInternal AuditTaxationCost AccountingBudgetingPlanning & Control
- 11. THANK YOU