FIN 5134: Financial Management and Practices

Introductory Lecture

Dr. M. Anwar Ullah, FCMA

Southeast University Bangladesh

Faculty of Business
MBA Program: 2017

anwarullah@hotmail.com Or anwar2023@yahoo.com.sg

1
 About Me
Academic background

PhD : AIT, Thailand (2011)

FCMA : ICMAB, Dhaka (2004)
MBA (EP & CS) : MSM, Netherland (2001)
PGD (MCMIS) : MSM, Netherland (1999)
M. Com : DU, Accounting (1986)
B. Com (Hons) : DU, Accounting (1985)

Job and Working Experience

Financial Services Company : 2 years
Civil Services : 26 years
Teaching : 14 years

Job and Working Experience

Financial Services Company : 2 years

Civil Services : 26 years
Teaching : 14 years

2
 Who am I?
 Your name
 Your previous University
 Your previous Degree
 Your Residential location
 Course(s) registration in this
semester
What is your expectation from this course?

 Understanding the subject

 Treasure the knowledge as we can
 Pass in the exam with maximum GPA
 Build our relationship!!!

Teacher Student

Facilitator Yes Competitors

A Teacher is a life long student, if he acts like a facilitator

BUT
he might face competition with his own students
Group Assignment: Building the Team
Group Assignment
The Financial Environment

• Financial and Money Markets

• Financial Institutions
• Monetary-Interest Rates, Inflation
• Fiscal policy – VAT, Taxes, Fees etc.
Some important questions that are
answered using finance

1. What long-term investments should the firm

take on?
2. Where will we get the long-term financing
to pay for the investment?
3. How will we manage the everyday financial
activities of the firm?

Financial managers try to answer some or all of

these questions
 Financial Management Decisions
• Capital budgeting
– What long-term investments or projects should
the business take on?

• Capital structure
– How should we pay for our assets?
– Should we use debt or equity?

• Working capital management

– How do we manage the day-to-day finances of
the firm?
 Goal of Financial Management
• What should be the goal of a corporation?
– Maximize profit?
– Minimize costs?
– Maximize market share?
– Maximize the current value of the company’s
stock?
• Does this mean we should do anything and
everything to maximize owner wealth?
Traditional investments
In its broadest definition, alternative investment assets are those
which are not part of traditional asset classes such as cash, stocks,
or bonds that retail investors are most familiar with. such as, real
estate or commodities or luxury goods such as art and the like.

Alternative investments
Alternative Investment will thus encompass a wide range of asset
classes, including private equity real estate and private equity
infrastructure funds, secondary funds, and private debt funds.
 Investment lifespan
Most types of alternative investments utilize closed-end fund
structures that have a fixed lifespan (typically 10-15 years). All of
the value of the investment is returned to investors within this
timeframe, who must then identify new investment opportunities to
reinvest the capital in.

Hedge funds are a noteworthy exception, as they usually offer open

ended funds, which are similar in style to traditional fund structures,
in that the capital is automatically reinvested with the fund unless the
investor requests that the capital be returned to them.
 Trust in Business
Business can do many positive things for society as a
whole:

• It can create jobs, growth and wealth. It can pay

wages and generate the profits from which tax
revenues are drawn.
• It can innovate to improve people’s lives, build
infrastructure and strengthen communities.
• But how effective are most businesses at contributing to
society in these ways?

• And does the public really believe they do this?

 Trust in Government and in Business

Undermined trust in government and big business in

recent years are often perceived as a series of stand-alone
crises, many of them can be categorized within wider
global trends.

These include rapidly rising executive pay, widening

income disparities, systematic tax evasion and various
types of corruption.

Combined with a perception of inadequate responses

from regulators and governments, these trends have
reinforced widespread public distrust of business and
government as a whole.
 Creating a Buffer for Trust

Trusted companies need a long-term perspective in their

thinking, and required their fund of trust to create a
buffer of credibility and sound reputation against
potentially damaging events.

When a crisis supposed to struck, stakeholders should

give businesses more time, leeway and benefit of the
doubt to respond and put things right.
Topics will covered in this
course
1. The Time Value of Money
2. Risk and Rates of Returns
3. Valuation Concepts
4. Capital Budgeting
5. Project Cash Flows and Risk
6. The Cost of Capital
7. Capital Structure
8. Dividend Policy
9. Leverage
10. Analysis of Financial Statements
11. Financial Planning and Control
12. Working Capital Policy
Thanks for Today