ASSIGNMENT ON FINANCIAL

MANAGEMENT
SUBMITTED TO: DR. RISHI
CHAUDHARY
SUBMITTED BY: SIMRAN; ROLL NO. :
182; CLASS: 5.5(B)
FINANCIAL
MANAGEMENT
SUBJECT: FINANCIAL MANAGEMENT
MEANING OF FINANCIAL MANAGEMENT

Financial Management refers to the sequential

activities of:
 Procurement of money.

 Utilisation of the procured money i.e.

investment i.e conversion of money into assets

and for making expenses to generate income.
MODEL OF FINANCIAL MANAGEMENT
FOUR DECISIONS
INVESTMENT DECISION
  The Investment Decision relates to
the decision made by the investors or the top
level management with respect to the amount of
funds to be deployed in
the investment opportunities. Simply, selecting
the type of assets in which the funds will
be invested by the firm is termed as
the investment decision.
FINANCING DECISION
 Financing decisions are the financial
decisions related to raising of finance. It involves
identification of various sources of finance and the
quantum of finance to be raised from long-term and
short-term sources. A firm can raise long
term finance either through shareholders' funds or
borrowed capital.
LIQUIDITY DECISION
 The liquidity decision is concerned with the
management of the current assets, which is a pre-
requisite to long-term success of any business firm.
This is also called as working capital decision. It is
concerned with the day-to-day financial operations
that involve current assets and current liabilities.
DIVIDEND DECISION
 The dividend decision is concerned with the
quantum of profits to be distributed among
shareholders. A decision has to be taken whether
all the profits are to be distributed, to retain all the
profits in business or to keep a part of profits in the
business and distribute others among shareholders.
BALANCING ACTS OF FINANCIAL
MANAGEMENT
FEATURES OF FINANCIAL MANAGEMENT

 The concept of cash flow i.e. the outflow and cash

inflow.
 Time value of money.
THE GOAL OF FINANCIAL MANAGEMENT

 The goal of financial management is to enrich the

shareholders by maximizing their wealth.
Shareholders wealth means returns to shareholders
i.e. the owners of the business. Returns to
shareholders can be in recurring from dividends;
and in the form of capital appreciation of their
investments.
WHO IS RESPONSIBLE FOR FINANCIAL
MANAGEMENT?
PROCESS
OBJECTIVES OF FINANCIAL
MANAGEMENT

 Profit maximisation
 Wealth maximisation
PROFIT MAXIMISATION
 Profit maximization, in financial management,
represents the process or the approach by
which profits Earning Per Share (EPS) is
increased. ... It implies that every decision relating
to business is evaluated in the light of profits.
WEALTH MAXIMISATION
CONCLUSION
PRESENTATION ON FINANCIAL
MANAGEMENT
SUBMITTED TO MR. RISHI CHAUDHARY