Scribd
Upload
51 views5 pages

Introduction to Financial Management Guide

This document provides an introduction to financial management. It defines finance as all resources held by a business and financial management as managing finances, planning, assessing risk, and making investment, funding, and shareholder decisions. The document also discusses agency problems between shareholders and management, different types of businesses including sole proprietorships, partnerships, and companies, and key terms related to companies like shareholders, shares, securities, dividends, and capital gains.

Uploaded by

Nicky Boje
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
51 views5 pages

Introduction to Financial Management Guide

This document provides an introduction to financial management. It defines finance as all resources held by a business and financial management as managing finances, planning, assessing risk, and making investment, funding, and shareholder decisions. The document also discusses agency problems between shareholders and management, different types of businesses including sole proprietorships, partnerships, and companies, and key terms related to companies like shareholders, shares, securities, dividends, and capital gains.

Uploaded by

Nicky Boje
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Topic:-

“Introduction to Financial Management”


1

What Is Finance:-
“ All the resources hold by the Business is called Finance.”

Management:-
It involves coordinating and overseeing the work
activities of others so that their activities are completed effectively & efficiently.

Managers:-
Those person who manage the business activities are called
managers. Manager should have that qualities.

M: Motivator

A: Activator

N: Negotiator

A: Achiever

G: Goal Setter

E: Evaluator

R: Risk Taker

1
Topic:-
“Introduction to Financial Management”
2

Financial Management:-
F.M refers to, managing the Finance, Plan the Finances,
Access Risk, Evaluate & Select the investment opportunities, Decide when and
where the finfnce is generated, How much money should be return to the
shareholder and investors.

Decision Areas:-
Such areas which are used to take decision for the Buiness.

 Financial Decision, Any type of techniques by observing which


option is less costly.
 Investment Decision, Selecting the best projects among available
projects.
 Asset Management Decision, A Techniques in which we observe
the ratio of the asset and select the best ratio among the available
combinations that observesd.

Agency Problems:-
The conflicts between the shareholder and management
is called Agency Problem.

How can Reduce these Problem:-


 Threat of job loss
 Stock offering
 Centeralized Decision Making

2
Topic:-
“Introduction to Financial Management”
3

Business:-
Any legal Activity for earning profit is called Business.

Types of Business:-
 Sole Propritorship
 Partnership
 Company

Sole Propritorship:-
One man controlling the all activities of the
business and the liabilities will be un-limited in this type of Business.

Partnership:-
Two or more than two persons controls the business the
liabilities will be un-limited in this type of Business.

Partnership Deed:-
It is an agreement which contains the term & conditions.

If deed is not available then partnership a ct will be available.

Diff. b/w ordinance & Act:-


 Ordinance, Attestation of the Parliament is necessary for
the Ordinance.

3
Topic:-
“Introduction to Financial Management”
4

 Act, Attestation of the Parliament is not necessary for the Act.

Company:-
“ It is an artificial person that is created by law.”

“ Company is a legal identity and treated as a person.”

Types of Company:-
 Public Company
 Private Company

Public Company:-
A Company who can issue shares to the general public is called
Public company. The members of Public Company Could be 7- un-limited”.

Private Company:-
A Company which can issue shares only to the owners is called
Private Company. The members of Private Company Could be 2- 50”.

Some Key Terms:-


 Share holders
 Share
 Security
 Dividend
 Capital Gain

4
Topic:-
“Introduction to Financial Management”
5

 Ordinance
 Act

Share Holders:-
Those persons who purchase the shares of the company is
called shareholders.

Share:-
Any type of security issued by the company for generating finance is
called Share.

Security:-
The Acknowledgement of fund is called Security.

Return:-
Those benefits which are given to the shareholders is called Return. It
could be in shape of Dividend & Capital Gain.

Return= Dividend + Capital Gain


 Dividend:-
The part of Profit distributed by the company and its
Shareholders.
 Capital Gain:-
The increase in the prices of shares is called Capital Gain.

You might also like