Business

Finance:
Introduction
 Topics Covered:

1. Definition of Finance
2. Accounting vs Finance
3. Types of Finance
4. Shareholder’s Wealth
Maximization
5. Financial Management
6. Corporate Organization
https://youtu.be/d09XKc4HkxM Structure
7. Roles of Financial Managers
8. Guiding Principles in
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Financial Management System
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 WHAT IS FINANCE

Gitman & Other

Zutter, 2012 Definition
• Science and • Management • Giving of Monetary
Art of of large Monetary Resources and
Managing amounts of Support for Affairs of a
Money Money an Government,
especially Enterprise Organization
by or person
Government
or Large
Companies.

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 Finance
Relationship
with Other
Subjects

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 Parameter of Accounting Finance
Comparison
Accounting involves the Finance is a wider and
management of day-to- broader term that
day financial involves the effective
Definition transactions and the management of business
flow of money and then assets and liabilities,
preparing the financial and further planning for
statements. positive future growth.

Pre-term activity where

the comprehensive study
Post-mortem activity is done to realize the
Activity Type that records what has funds or assets
already happened. requirements of an
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organization or business.
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Parameter of Accounting
Comparison
To collect, classify, and
present the current financial
Aim information about the
business that can be used
internally as well as externally
Finance
To manage, control,
strategize, and make
decisions about business
finances. It involves the view-
point of futuristic benefits.

Future: The scope of work

Past: Record daily transaction involves assessing financial
Scope
of the business statements or analyzing and
planning for future financial

Attention to Detail High High

Focus On Reliability & Accuracy. On Analysis & formulating

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Insig1 4 hts.
Parameter of Accounting Finance
Comparison

Communicating the Finding the ways &

health of the business means on how mor e
Purpose financial position i.e. value in terms of
whether incurring financial position ca n
profits or loss. be added.

Accounting activity is
Finance is driven by
carried by the specific
Analysis that is base d
Driven By rules that are defined
on the expertise an d
for them i.e. what,
capabilities of the
when, and how.

Public/private
Banks, Consultancy,
Used In accounting firms,
Corporations.
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corporations.
Parameter of Accounting Finance
Comparison

Determination of
funds in Finance is
The determination of
based on the accrual
funds in Accounting is
system, i.e. revenue
based on cash flow
is recognized at the
Fund Realization and receipts &
time when the sale is
payments that are
done not when it is
realized for revenue
collected. Expenses
and returns.
are also realized when
they are incurred.
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 WHAT IS YOUR IDEA?

Can you say that a

“profitable company” is a
Assume that you are What do you think of successful company? Can
the biggest a company who has a success be attributed to
shareholder in a very large amount of profitability only? Is it
corporation. What are cash. possible that a company
the objectives you can have profits but still
want to achieve as does not have enough cash
owners of to pay its obligations (ie
corporations? suppliers, lenders)

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 WHAT IS YOUR IDEA?

Can you say that a

“profitable company” is a
Assume that you are What do you think of successful company? Can
the biggest a company who has a success be attributed to
shareholder in a very large amount of profitability only? Is it
corporation. What are cash. possible that a company
the objectives you can have profits but still
want to achieve as does not have enough cash
owners of to pay its obligations (ie
corporations? suppliers, lenders)

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 Thank you

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