FINANCIAL

MANAGEMENT
LONG TERM SOURCES OF FINANCE WITH EMPHAS
OWNED FUNDS.

•EQUITY SHARE CAPITAL

•PREFERENCE SHARE CAPIT
•RETAINED EARNING
LOGO
 SOURCES OF FINANCE

SHORT TERM LONG TERM

RADE CREDITS PURCHASE OF FIXED ASSET
REDIT FROM SUPPLIERS FUNDING EXPANSIONS
DVANCE FROM DEALERS DIVERSIFICATIONS
 LONG TERM FINANCE

OWNED FUNDS BORROWED FUNDS

SHARES RETAINED EARNING

LOGO
 SHARES
A SHARE HAS BEEN DEFINED BY THE INDIAN COMPAN
ACT, 1956

SHARE MEANS SHARE IN THE SHARE CAPITAL OF THE

COMPANY & INCLUDES STOCK EXCEPT WHERE A
DISTINCTION BETWEEN STOCK & SHARE IS EXPRESSE
OR IMPLIED.

THE LIABILITY OF THE SHAREHOLDER IS LIMITED TO

EXTENT OF THE FACE VALUE OF THE SHARES.
 A SHAREHOLDER- MEMBER OF THE COMP
NUMBERS OF MEMBERS (MEMBERSHIP ) IN CASE OF A COMPANY

PRIVATE COMPANY PUBLIC COMPANY

MINIMUM 2 7

MAXIMUM 50 UNLIMITED
 AUTHORISED CAPITAL

ISSUED CAPITAL UNISSUED CAPITAL

SUBSCRIBED CAPITAL UNSUBSCRIBED CAPITAL

CALLED UP CAPITAL UNCALLED CAPITAL RESERVE CAPITAL

AID UP CAPITAL CALLS IN ARREARS (UNPAID CAPITAL)

 SHARES

QUITY SHARES PREFERENCE SHARE

 EQUITY SHARES

• RISK BEARING CAPITAL

• NO FIXED RATE OF DIVIDEND

• RIGHT TO VOTE

• OWNERS OF THE COMPANY

 RIGHTS OF EQUITY SHAREHOLDERS
• THE RIGHT TO RESIDUAL INCOME

• RIGHT OF CONTROL

• PRE-EMPTIVE RIGHT

• RESIDUAL CLAIMANTS OVER ASSETS

 ADVANTAGES OF EQUITY SHARES

TO THE ISSUING COMPANY-

• PERMANENT SOURCE OF CAPITAL

• NO FIX DIVIDEND

• CREDITWORTHYNESS OF THE COMPANY

DISADVANTAGES OF THE EQUITY SHARE

TO THE ISSUING COMPANY-

• NOT A TAX-DEDUCTIBLE EXPENSE

• FLOATATION COST IS HIGHER

• OVER CAPITALISATION

• DILUTION OF CONTROL
ADVANTAGES OF EQUITY SHARES

TO THE SHAREHOLERS-

• HIGHLY PROFITABLE SHRES

• OWNERS OF THE COMPANY

• LIMITED LIABILITY
DISADVANTAGES OF EQUITY SHARES

TO THE SHAREHOLERS-

• RISK CAPITAL

• CONTROL OVER THE MANAGEMEN

• FLUCTUATION
 PREFERENCE SHARES

FERENCE SHARES ARE THOSE SHARES WHICH E

RITIES IN THE PAYMENT OF DIVIDEND AS WELL
REPAYMENT OF THE CAPITAL

FERENCE SHAREHOLDERS ARE ENTITLED TO RE

XED RATE OF DIVIDEND BEFORE THE DIVIDEND I
TO THE EQUITY SHARESHOLDERS.
 TYPES OF PERFERENCE SHARES

.PARTICIPATING AND NON PARTICIPATING SHAR

.REDEEMABLE AND IRREDEEMABLE SHARES

.CUMULATIVE AND NON CUMULATIVE SHARES

.CONVERTIBLE AND NON CONVERTIBLE SHARES

FEATURES OF PREFERENCE SHARES-
• HYBRID SECURITY

• PREFERENCIAL RIGHTS

• PREFERENCIAL RIGHT ON FIXED DIVIDENDS.

• DEMAND UNPAID ARREARS

• VOTING RIGHTS

• CONVERSION OF SHARES

• RIGHT TO SHARE SURPLUS PROFITS

 ADVANTAGES OF OWNED FUNDS

NDICATES THE OWNERS STAKE AND INTER

CUSHION FOR RAISING BORROWED FUNDS
PROPOTION
NO OBLIGATION
SAFETY TO THE LENDERS
RIGHT TO ACTIVE PARTICIPATION
 RETAINED EARNINGS
STEAD OF DISRTIBUTING THE ENTIRE PROFITS T
AREHOLERS, COMPANY RETAINS SOME PROFITS
E PURPOSE OF-

ACCUMULATIONS OF EARNINGS
NVESTMENT IN FIXED ASSETS
O MEET WORKING CAPITAL NEEDS
 MERITS OF PLOUGHING BACK OF PROFITS

TO THE COMPANY-

CONOMICAL
FFICIENCY AND PRODUCTIVITY
ONFIDENCE OF SHAREHOLDERS
NHANCES CREDITWORTHYNESS
ESS FINANCIAL RISK
EPAYMENTS OF DEBENTURES AND TERM LO
• REDUCES THE RELIANCE
• HELPS EXPANSION AND
DIVERSIFICATION
• HELPS AUTOMATION AND
MODERNISATION
• USED TO MEET WORKING CAPITAL
NEEDS
• FOLLOWS A STABLE DIVIDEND
POLICY
• FREEDOM TO TAKE THEIR OWN
 TO THE SHAREHOLDERS

• APPRECIATION IN SHARE VALUES

• BONUS SHARES
• REGULAR DIVIDENDS
• SECURITY VALUE
TO THE SOCIETY

• INCREASES CAPITAL FORMATION

• HELPS SPEEDY DEVELOPMENT
• BENEFITS TO THE CONSUMERS
• SOCIAL WELFARE ACTIVITIES
 DEMERITS OF PLOGHING BACK OF PROFI

ANGER OF MANIPULATION
HANCES OF OVER CAPITALISATION
PROPER USE OF RETAIN EARNINGS
O SHARE OF DIVIDEND
AD TO EXCESSIVE SPECULATIONS
AD TO MORE DEMENDS FROM EMPLOYEES
ONCENTRATION OF ECONOMIC POWER IN FEW H
DETERMINANTS OF INTERNAL FINANCIN

• TOTAL EARNING OF THE ENTERPRISE

• TAXATION POLICY OF THE GOVERNMEN
• DIVIDEND POLICY
• GOVERNMENT ATITUDES AND CONTRO
• OTHER FACTORS
 MERITS OF INTERNAL FINANCING

ADVANTAGES RO THE COMPANY-

• BEST AND CHEAPEST SOURCE OF FINANC

• STABLE DIVIDEND POLICY
• INCREASE IN MORALE OF MANAGEMENT
• SAFETY FROM TRADE CYCLES
 ADVANTAGES TO THE SHAREHOLDER
• INCRAESE IN THE VALUE OF THE SHARE
• INCREASE IN EQUITY
• INCREASE IN THE COLLATERAL VALUE OF SHA

ADVANTAGES TO THE SOCIETY

• CAPITAL FORMATION
• INCRAESE IN SOCIAL WELFARE
DEMERITS OF INTERNAL FINANCING

• DANGER OF MONOPOLY
• FEAR OF OVER-CAPITALISATION
• LOSS OF SHAREHOLDERS
Group members-
Ankita Joshi- 210

Anuja Rane- 231

Shradhangi Date- 208

Ranal Nair- 223

Prathamesh Kulkarni- 218

Praful Shetty- 240

THANK YOU