FINANCIAL MANAGEMENT

I-CHPTER

 DEFINATION OF FINANCIAL MANAGEMENT

 FUNCTIONS OF FINANCIAL MANAGEMENT

FUNCTIONS OF
FINANCIAL
MANAGMENT

FINANCIANG INVENSTMENT DIVIDEND LIQUIDITY

FUNCTION FUNCTION FUNCTION FUNCTION

 FINANCIAL GOALS

FINANCIAL
GOALS

PROFIT SHARE HOLDERS WEALTH

MAXIMISATION MAXIMISATION

 RISK-RETURN TRADE OFF

RISK –RETURN TARDE

OFF

RISK DEFAULT (OR) RISK RISK

FREE RATE PREMIUM

II-CHAPTER

 NATURE OF INVESTMENT DECISIONS

 TYPES OF INVESTMENT DECISIONS
 IMPORTENCE OF INVESTMENT DECISIONS
 INVESTMENT CLASSIFIATION
 DIFFERENCESS BETWEEN I.R.R AND N.P.V

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  CAPITAL BUDGETING TECHNIQUES

CAPITAL
BUDGETING
TECHNIQUE
S

NON-
DISCOUNT
DISCOUNT
CASH FLOW
CASH FLOW
TECHNIQUE
TECHNIQUE

INTERN
NET PROFIT DISCOUNT ACCOUNTIN
AL RATE PAY BACK
PRESEN ABILITY PAY BACK G RATE OF
OF PERIOD
T VALUE RETURN INDEX PERIOD RETURN

III-CHAPTER

 DEFINE THE COST OF CAPITAL

 RISK CLASSIFICATIONS

RISK
CLASSIFICATI
ONS

SYSTAMATIC UNSYSTAMATI
RISK (β) (NON C RISK
DIVERSIFICAT (DIVERSIFICA
ION) TION)

INTREST INFLATION BUSINESS COMPANY MANAGEMEN

MARKET RISK
RATE RISK RISK RISK RISK T RISK

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  FACTORS OF THE COST OF CAPITAL

FACTORS OF THE
COST OF CAPITAL

GENRAL
FLOTATION MANAGEMENT
ECONOMIC RISK
COSTS RISK
CONDITIONS

 IMPORTANCE OF COST OF CAPITAL

IMPORTANCE OF COST
OF CAPITAL

DESINGING BOND
INVESTMENT POLICY PERFORMANCE
EVALUATION APPRISAL

 DIFFERENCE BETWEEN WACC AND SPECIFIC COST OF CAPITAL

 COST OF INNERNAL EQUITY(DIVIDEND + RETENTION)
 CAPM(CAPITAL ASSETS PRICING MODEL)

CAPM

RISK RISK
BETA (β)
DEFAULT PREMIUM

 EXPLAIN THE WACC(WEAIGHTED AVERAGE COST OF CAPITAL)

IV-CHAPTER

 DIVIDEND TEORY
DIVIDEND
THEORY

DIVIDEND DIVIDEND
RELAVENCE IRRELAVENCE

MILLAR-MODI (MM)
WALTER MODEL GORDON MODEL
THEORY

 DIVIDEND RELAVENCE
 WALTER MODEL
P=DIV+(r/k)(EPS-DIV)/K
P=MARKET PRICE
DIV=DIVIDEND
EPS=EARNING PER SHARE
r=INTERNAL RATE OF RETURN
k=CUT OFF RATE

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  GORDON MODEL
P=EPS(1-b)/k-br
P=MARKET PRICE
EPS=EARNING PER SHARE
b=RETENTION
r=INTERNAL RATE OF RETURN
k=CUT OFF RATE
 DIVIDEND IRRELAVENCE
 MM-THEORY

V-CHAPTER

 IMPORTANCE OF WORKING CAPITAL

 CLASSIFICATION OF WORKING CAPITAL

CLASSIFICATION
OF WORKING
CAPITAL

CONCEPT TIME
BASIS BASIS

GROSS VARAIBLE
NET WORKING FIXED WORKING
WORKING WORKING
CAPITAL CAPITAL
CAPITAL CAPITAL

 OPERATING CYCLE AND CASH CONVERSION CYCLE

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 RAW
MATERIAL
CASH
CONVERSION
PERIOD

WORK IN
SALES
PROGRESS
CONVERSION
CONVERSION
PERIOD
PERIOD

FINISHED
GOODS
CONVERSION
PERIOD

 DEBTORS CONVERSION PERIOD

 CREDITORS CONVERSOIN PERIOD
 NET OPERATING CYCLE (OR) CASH CONVERSION CYCLE
{GROSS OPERATING CYCLE - CREDITORS CONVERSION PERIOD=NET
OPERATING CYCLE}
{INVENTORY CONVERSION PERIOD + DEBTORS CONVERSION PERIOD=GROSS
OPERATING CYCLE}
 FOCUSING ON LIQUIDITY MANAGEMENT
 DIFFERENCE BETWEEN PERMANENT WORKING CAPITAL AND VARIABLE
WORKING CAPITAL
 BALANCED WORKING CAPITAL
 DIFFERENCE BETWEEN LIQUIDITY AND PROFITABILITY

 THE COST TRADE OFF

COST TRADE OFF

COST OF LIQUIDITY COST OF ILLIQUIDITY

 WORKING CAPITAL FINANCING

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 LONG TERM
FINANCING

WORKING
CAPITAL
FINANCING

SPONTANEO SHORT
US TERM
FINANCING FINANCING

 WORKINC CAPITAL APPROCHES

AGGRESSIVE
APPROCHE

WORKING
CAPITAL
APPROCHES

MATCHING CONSERVATIVE
APPROCHE APPROCHE

 CASH MANAGEMENT CYCLE

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  HOLDINGS IN CASH

HOLDINGS IN CASH

TRANSACTION PRECAUTIONARY SPECULATIVE

MOTIVE MOTIVE MOTIVE

VI-CHAPTER

 CLASSIFICATION OF RATIOS

CLASSIFICATION
OF RATIOS

LIQUIDITY LEVERAGE PROFITABILITY

ACTIVITY RATIO
RATIO RATIO RATIO

VII-CHAPTER

 DIFFRENCE BETWEEN FUNDS FLOW AND CASH FLOW ANALYSIS

VII-CHAPTER

 NETINCOME APPROACHE THEORY

 TRADITIONAL APPROACHE THEORY

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