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Meaning Of Business Finance

THERE ARE 3 MAIN APPROACHES TO FINANCE:

To provide finance as to providing of funds needed by a business –


(From where funds can be procured)
Finance to cash
Raising of funds and their effective utilization .
Relationship of Finance with other
Business Functions

Purchase Production Distribution


Function function function

Accounting Personnel
function function

Research & development


function
FINANCIAL MANAGEMENT

FINANCIAL MANAGEMENT refers to that part of the


management activity which is concerned with the planning
and controlling of firm’s financial resources.
OBJECTIVES OF
FM

PROFIT WEALTH
MAXIMISATION MAXIMISATION
SCOPE OF FM/ FINANCIAL DECISIONS

THE FINANCING THE INVESTMENT THE DIVIDEND


DECISION DECISION DECISION

• CAPITAL STRUCTURE • DIVIDEND PAY-OUT


THEORY. • CAPITAL BUDGETING. RATIO.
• CAPITAL STRUCTURE • WORKING CAPITAL
DECISION. MANAGEMENT.
FINANCIAL MANAGEMENT

Is concerned with

Financing decision Investment decision Dividend decision

Analyses

Risk and Return Relationship


(Trade off)

To achieve the goal of

Wealth maximization
EMERGING ROLE OF FINANCE
MANAGERS
 FINANCIAL STRUCTURE
 FOREIGN EXCHANGE.
 TREASURY OPERATIONS.
 INVESTOR COMMUNICATION.
 MANAGEMENT CONTROL
 INVESTMENT PLANNING.