Topic:-

“Introduction to Financial Management”

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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

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Topic:-
“Introduction to Financial Management”
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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

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“Introduction to Financial Management”
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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.

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 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

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 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.