financial management

Information about financial management

Published on November 14, 2008

Author: aSGuest3240

Source: authorstream.com

Content

FINANCIAL MANAGEMENT : FINANCIAL MANAGEMENT MODULE 1 CONCEPTS : CONCEPTS FINANCE IT IS THE ART AND SCIENCE OF MANAGING MONEY FINANCIAL MANAGEMENT IT IS CONCERNED WITH THE DUTIES OF THE FINANCIAL MANAGERS IN THE BUSINESS FIRM Slide 3: FINANCIAL MANAGERS ACTIVELY MANAGE THE FINANCIAL AFFAIRS OF ANY TYPE OF BUSINESS, NAMELY, FINANCIAL AND NON-FINANCIAL, PRIVATE AND PUBLIC, LARGE AND SMALL, PROFIT-SEEKING AND NOT-FOR-PROFIT. FINANCIAL MANAGEMENT & OTHER DISCIPLINES : FINANCIAL MANAGEMENT & OTHER DISCIPLINES FINANCIAL MANAGEMENT IS AN INTEGRAL PART OF OVERALL MANAGEMENT, IS NOT A TOTALLY INDEPENDENT AREA. IT DRAWS HEAVILY ON RELATED DISCIPLINES AND FIELDS OF STUDY, SUCH AS ECONOMICS, ACCOUNTING, MARKETING, PRODUCTION AND QUANTATIVE METHODS FINANCE AND ECONOMICS : FINANCE AND ECONOMICS THE RELEVANCE OF ECONOMICS TO FINANCIAL MANAGEMENT CAN BE DESCRIBED IN THE LIGHT OF THE TWO BROAD AREAS OF ECONOMICS: MACRO ECONOMICA MICROECONOMICS FINANCE AND ACCOUNTING : FINANCE AND ACCOUNTING THE RELATIONSHIP BETWEEN FINANCE AND ACCOUNTING CONCEPTUALLY SPEAKING HAS TWO DIMENSIONS: THEY ARE CLOSELY RELATED TO THE EXTENT THAT ACCOUNTING IS AN IMPORTANT INPUT IN FINANCIAL DECISION MAKING THERE ARE KEY DIFFERENCES IN VIEWPOINTS BETWEEN THEM Slide 7: FINANCE AND ACCOUNTING ALSO DIFFER IN RESPECT OF THEIR PURPOSES. THE ACCOUNTING IS COLLECTION AND PRESENTATION OF FINANCIAL DATA. IT PROVIDES CONSISTENTLY DEVELOPED AND EASILY INTERPRETED DATA ON THE PAST, PRESENT AND FUTURE OPERATIONS OF THE FIRM. THE FINANCIAL MANAGER USES SUCH DATA FOR FINANCIAL DECISION MAKING. IT DOESNOT MEAN THAT ACCOUNTANTS NEVER MAKE DECISIONS OR FINANCIAL MANAGERS NEVER COLLECT DATA. BUT THE PRIMARY FOCUS OF THE FUNCTIONS OF ACCOUNTANTS IS ON COLLECTION AND PRESENTATION OF DATA WHILE THE FINANCIAL MANAGER’S MAJOR RESPONSIBILITY RELATES TO FINANCIAL PLANNING, CONTROLLING AND DECISION MAKING. THUS, IN A SENSE, FINANCE BEGINS WHERE ACCOUNTING ENDS. Slide 8: FINANCIAL DECISION AREAS INVESTMENT ANALYSIS WORKING CAPITAL MANAGEMENT SOURCES & COST OF FUNDS DETERMINATION OF CAPITAL STRUCTURE DIVIDEND POLICY ANALYSIS OF RISKS & RETURNS RESULTING IN SHAREHOLDERS WEALTH MAXIMISATION PRIMARY DISCIPLINES ACCOUNTING MACROECONOMICS MICROECONOMICS OTHER RELATED DISCIPLINES MARKETING PRODUCTION QUANTATIVE METHODS SUPPORT SUPPORT IMPACT OF OTHER RELATED DISCIPLINES ON FINANCIAL MANAGEMENT FUNCTIONS OF FINANCE : FUNCTIONS OF FINANCE INVESTMENT DECISION FINANCE DECISION DIVIDEND POLICY DECISION SCOPE OF FINANCIAL MANAGEMENT : SCOPE OF FINANCIAL MANAGEMENT TRADITIONAL APPROACH MODERN APPROACH ROLE OF FINANCE MANAGER : ROLE OF FINANCE MANAGER

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