UNIT-1, Financial Management by B S R MURTHY
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This document provides an introduction to financial management. It defines financial management and discusses its nature, scope, importance and goals. Financial management is defined as the area of business decision-making related to capital allocation and source selection to help an organization achieve its objectives. The nature of financial management includes estimating financial needs, selecting financing sources, investment decisions, cash management, financial control, surplus use and determining firm growth. The document also outlines the traditional and modern scopes of financial management and explains the significance of financial functions to business management, profitability, and firm value. Common goals of financial management are then listed, such as profit maximization, shareholder wealth maximization, and maintaining liquidity and solvency.
UNIT-1, Financial Management by B S R MURTHY
- 1. Introduction to Financial Management BEDADURI RAMA MURTHY
- 2. BEDADURI RAMA MURTHY B. Com, B.ED, MBA, ( M. Com ), AP-SET, Associate Professor Dept. MBA , GIVC And Teaching Associate , Academy Of Basic Concepts Zone (ABCZ) Room No 26, Metro Complex, Near Girls College, Madanapalli. brmurthy.mba@gmail.com
- 3. Financial Management ď‚— Financial Management is an Integral are of Business Transactions and Management. The Financial Management can be defined as Financial Management is an area of financial decision-making harmonizing individuals and enterprise goals. Weston and Brigham ď‚— Financial Management is the area of business management devoted to a judicious use of capital and a careful selection of sources of capital in order to enable a spending unit to move in the direction of reaching its goals. J.F. Bradley ď‚— Financial Management as concerned with the acquisition, financing and management of assets with some overall goal in mind. James C. Van Horne
- 4. Nature of Financial Management  Estimating Financial Requirement  Selecting a Sources of Finance  Selecting a patron of Investment  Proper Cash Management  Implementing Financial Control  Proper Use of Surplus  It’s determined Growth of the Firm
- 5. Nature of Financial Management  Estimating Financial Requirement  Selecting a Sources of Finance  Selecting a patron of Investment  Proper Cash Management  Implementing Financial Control  Proper Use of Surplus  It’s determined Growth of the Firm
- 6. Nature of Financial Management  Estimating Financial Requirement  Selecting a Sources of Finance  Selecting a patron of Investment  Proper Cash Management  Implementing Financial Control  Proper Use of Surplus  It’s determined Growth of the Firm
- 7. Nature of Financial Management  Estimating Financial Requirement  Selecting a Sources of Finance  Selecting a patron of Investment  Proper Cash Management  Implementing Financial Control  Proper Use of Surplus  It’s determined Growth of the Firm
- 8. Nature of Financial Management  Estimating Financial Requirement  Selecting a Sources of Finance  Selecting a patron of Investment  Proper Cash Management  Implementing Financial Control  Proper Use of Surplus  It’s determined Growth of the Firm
- 9. Nature of Financial Management  Estimating Financial Requirement  Selecting a Sources of Finance  Selecting a patron of Investment  Proper Cash Management  Implementing Financial Control  Proper Use of Surplus  It’s determined Growth of the Firm
- 10. Nature of Financial Management  Estimating Financial Requirement  Selecting a Sources of Finance  Selecting a patron of Investment  Proper Cash Management  Implementing Financial Control  Proper Use of Surplus  It’s determined Growth of the Firm
- 11. Scope Of Financial Management ď‚— Traditional Approach ď‚— Modern Approach
- 12. Scope Of Financial Management ď‚— Modern Approach ď‚— Investment Decision, ď‚— Financing Decision, ď‚— Capital Decision, ď‚— Working Capital Decisions ď‚— Dividend Policy Decision, ď‚— Interest rate decision and ď‚— Exchange rate decision
- 13. Scope Of Financial Management ď‚— Traditional Approach (1920-1930) (Institutional sources of finance, Issue of financial instruments and legal relationship) ď‚— Procurement of short-term, medium-term and long-term funds from different sources of financial Institutions. ď‚— Funds are raising through financial instruments like Equty Share, Preference Shares, Debentures, Bonds Etc. ď‚— Looking after the legal and accounting relationship between a company and its sources of funds. ď‚— Redistribution of income and assets among these resources.
- 14. Importance Of Finance Functions Financial management has special significance in the origin Growth of corporation in modern times. ď‚— Significant part of Business Management ď‚— Liquidity and Profitability ď‚— Value of the Firm ď‚— Centralized Nature ď‚— Benefit to Investors ď‚— Processing at Minimum Cost ď‚— Best Mixer of Investment ď‚— Controlling Expenditure ď‚— Stable Growth through Exposition
- 15. Importance Of Finance Functions Financial management has special significance in the origin Growth of corporation in modern times. ď‚— Significant part of Business Management ď‚— Liquidity and Profitability ď‚— Value of the Firm ď‚— Centralized Nature ď‚— Benefit to Investors ď‚— Processing at Minimum Cost ď‚— Best Mixer of Investment ď‚— Controlling Expenditure ď‚— Stable Growth through Exposition
- 16. Importance Of Finance Functions Financial management has special significance in the origin Growth of corporation in modern times. ď‚— Significant part of Business Management ď‚— Liquidity and Profitability ď‚— Value of the Firm ď‚— Centralized Nature ď‚— Benefit to Investors ď‚— Processing at Minimum Cost ď‚— Best Mixer of Investment ď‚— Controlling Expenditure ď‚— Stable Growth through Exposition
- 17. Importance Of Finance Functions Financial management has special significance in the origin Growth of corporation in modern times. ď‚— Significant part of Business Management ď‚— Liquidity and Profitability ď‚— Value of the Firm ď‚— Centralized Nature ď‚— Benefit to Investors ď‚— Processing at Minimum Cost ď‚— Best Mixer of Investment ď‚— Controlling Expenditure ď‚— Stable Growth through Exposition
- 18. Importance Of Finance Functions Financial management has special significance in the origin Growth of corporation in modern times. ď‚— Significant part of Business Management ď‚— Liquidity and Profitability ď‚— Value of the Firm ď‚— Centralized Nature ď‚— Benefit to Investors ď‚— Processing at Minimum Cost ď‚— Best Mixer of Investment ď‚— Controlling Expenditure ď‚— Stable Growth through Exposition
- 19. Importance Of Finance Functions Financial management has special significance in the origin Growth of corporation in modern times. ď‚— Significant part of Business Management ď‚— Liquidity and Profitability ď‚— Value of the Firm ď‚— Centralized Nature ď‚— Benefit to Investors ď‚— Processing at Minimum Cost ď‚— Best Mixer of Investment ď‚— Controlling Expenditure ď‚— Stable Growth through Exposition
- 20. Importance Of Finance Functions Financial management has special significance in the origin Growth of corporation in modern times. ď‚— Significant part of Business Management ď‚— Liquidity and Profitability ď‚— Value of the Firm ď‚— Centralized Nature ď‚— Benefit to Investors ď‚— Processing at Minimum Cost ď‚— Best Mixer of Investment ď‚— Controlling Expenditure ď‚— Stable Growth through Exposition
- 21. Importance Of Finance Functions Financial management has special significance in the origin Growth of corporation in modern times. ď‚— Significant part of Business Management ď‚— Liquidity and Profitability ď‚— Value of the Firm ď‚— Centralized Nature ď‚— Benefit to Investors ď‚— Processing at Minimum Cost ď‚— Best Mixer of Investment ď‚— Controlling Expenditure ď‚— Stable Growth through Exposition
- 22. Importance Of Finance Functions Financial management has special significance in the origin Growth of corporation in modern times. ď‚— Significant part of Business Management ď‚— Liquidity and Profitability ď‚— Value of the Firm ď‚— Centralized Nature ď‚— Benefit to Investors ď‚— Processing at Minimum Cost ď‚— Best Mixer of Investment ď‚— Controlling Expenditure ď‚— Stable Growth through Exposition
- 23. Importance Of Finance Functions Financial management has special significance in the origin Growth of corporation in modern times. ď‚— Significant part of Business Management ď‚— Liquidity and Profitability ď‚— Value of the Firm ď‚— Centralized Nature ď‚— Benefit to Investors ď‚— Processing at Minimum Cost ď‚— Best Mixer of Investment ď‚— Controlling Expenditure ď‚— Stable Growth through Exposition
- 24. Importance Of Finance Functions Financial management has special significance in the origin Growth of corporation in modern times. ď‚— Significant part of Business Management ď‚— Liquidity and Profitability ď‚— Value of the Firm ď‚— Centralized Nature ď‚— Benefit to Investors ď‚— Processing at Minimum Cost ď‚— Best Mixer of Investment ď‚— Controlling Expenditure ď‚— Stable Growth through Exposition
- 25. Importance Of Finance Functions Financial management has special significance in the origin Growth of corporation in modern times. ď‚— Significant part of Business Management ď‚— Liquidity and Profitability ď‚— Value of the Firm ď‚— Centralized Nature ď‚— Benefit to Investors ď‚— Processing at Minimum Cost ď‚— Best Mixer of Investment ď‚— Controlling Expenditure ď‚— Stable Growth through Exposition
- 26. The new Roll in Contemporary scenario ď‚— Greeter Impact on Capitalist World ď‚— Economical Resources ď‚— More Effective Management (Wealth management) ď‚— Financial Risk by Institutional ď‚— Global Economy
- 27. The new Roll in Contemporary scenario ď‚— Greeter Impact on Capitalist World ď‚— Economical Resources ď‚— More Effective Management (Wealth management) ď‚— Financial Risk by Institutional ď‚— Global Economy
- 28. The new Roll in Contemporary scenario ď‚— Greeter Impact on Capitalist World ď‚— Economical Resources ď‚— More Effective Management (Wealth management) ď‚— Financial Risk by Institutional ď‚— Global Economy
- 29. The new Roll in Contemporary scenario ď‚— Greeter Impact on Capitalist World ď‚— Economical Resources ď‚— More Effective Management (Wealth management) ď‚— Financial Risk by Institutional ď‚— Global Economy
- 30. The new Roll in Contemporary scenario ď‚— Greeter Impact on Capitalist World ď‚— Economical Resources ď‚— More Effective Management (Wealth management) ď‚— Financial Risk by Institutional ď‚— Global Economy
- 31. The new Roll in Contemporary scenario ď‚— Greeter Impact on Capitalist World ď‚— Economical Resources ď‚— More Effective Management (Wealth management) ď‚— Financial Risk by Institutional ď‚— Global Economy
- 32. Goals of Finance Functions ď‚— Profit Maximization ď‚— Maximizing shareholders wealth ď‚— Maximizing Profitability ď‚— Maximizing Profit Subject to cash constraint ď‚— Maximizing Net present wroth and ď‚— Seeking an optimum position along a risk-return frontier ď‚— Target Market share ď‚— Sustaining and maintaining the business position ď‚— Maintaining financial liquidity and Solvency
- 33. Goals of Finance Functions ď‚— Profit Maximization ď‚— Maximizing shareholders wealth ď‚— Maximizing Profitability ď‚— Maximizing Profit Subject to cash constraint ď‚— Maximizing Net present wroth and ď‚— Seeking an optimum position along a risk-return frontier ď‚— Target Market share ď‚— Sustaining and maintaining the business position ď‚— Maintaining financial liquidity and Solvency
- 34. Goals of Finance Functions ď‚— Profit Maximization ď‚— Maximizing shareholders wealth ď‚— Maximizing Profitability ď‚— Maximizing Profit Subject to cash constraint ď‚— Maximizing Net present wroth and ď‚— Seeking an optimum position along a risk-return frontier ď‚— Target Market share ď‚— Sustaining and maintaining the business position ď‚— Maintaining financial liquidity and Solvency
- 35. Goals of Finance Functions Profit Maximization Maximizing shareholders wealth Maximizing Profitability Maximizing Profit Subject to cash constraint Maximizing Net present wroth and Seeking an optimum position along a risk-return frontier Target Market share Sustaining and maintaining the business position Maintaining financial liquidity and Solvency
- 36. Goals of Finance Functions Profit Maximization Maximizing shareholders wealth Maximizing Profitability Maximizing Profit Subject to cash constraint Maximizing Net present wroth and Seeking an optimum position along a risk-return frontier Target Market share Sustaining and maintaining the business position Maintaining financial liquidity and Solvency
- 37. Goals of Finance Functions Profit Maximization Maximizing shareholders wealth Maximizing Profitability Maximizing Profit Subject to cash constraint Maximizing Net present wroth and Seeking an optimum position along a risk-return frontier Target Market share Sustaining and maintaining the business position Maintaining financial liquidity and Solvency
- 38. Goals of Finance Functions Profit Maximization Maximizing shareholders wealth Maximizing Profitability Maximizing Profit Subject to cash constraint Maximizing Net present wroth Seeking an optimum position along a risk-return frontier Target Market share Sustaining and maintaining the business position Maintaining financial liquidity and Solvency
- 39. Goals of Finance Functions Profit Maximization Maximizing shareholders wealth Maximizing Profitability Maximizing Profit Subject to cash constraint Maximizing Net present wroth and Seeking an optimum position along a risk-return frontier Target Market share Sustaining and maintaining the business position Maintaining financial liquidity and Solvency
- 40. Goals of Finance Functions Profit Maximization Maximizing shareholders wealth Maximizing Profitability Maximizing Profit Subject to cash constraint Maximizing Net present wroth and Seeking an optimum position along a risk-return frontier Target Market share Sustaining and maintaining the business position Maintaining financial liquidity and Solvency
- 41. Goals of Finance Functions Profit Maximization Maximizing shareholders wealth Maximizing Profitability Maximizing Profit Subject to cash constraint Maximizing Net present wroth Seeking an optimum position along a risk-return frontier Target Market share Sustaining and maintaining the business position Maintaining financial liquidity and Solvency
- 42. Thanking You