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Introduction to Financial

Management

Why Study Finance

Career Opportunities in Finance


Money and Capital Market
Investments
Financial Management

Business Finance is the act or


process
of
accumulation
and
utilisation of funds in order to
accomplish a firm's ultimate goal of
maximisation of owners wealth
act or process
accumulation
utilisation
accomplish a firm's ultimate
goal maximisation of owners
wealth

Major Responsibilities of Financial


Managers
Forecasting and Planning
Major Investment and Financing Decision.
Coordination and Control
Dealing with Financial Market
Risk Management

People working in financial management make decision


regarding which assets their firms should acquire, how
those assents should be financed and how the firm
should conduct the operation.

AGENCY RELATIONSHIP CONFLICT

Few Conflicting Situations


Shareholders wealth maximization takes

back seat
Maximize size of the firms:
increase job security
increase own power
create more opportunities
Appetite for salaries and perquisites

Financial Environment
Financial Market
Regulatory Authority/Bodies
Tax Structures
Different Trade Bodies
Different Support Organizations

Ways to Mitigate Conflict

Managerial Compensation
Direct Intervention of Shareholders
Threat of Firing
Threat of Takeovers

A financial market can be


defined as the system in which
communication
networks,
financial
institutions
and
relevant rules and regulations
are established and activated
in-order to facilitate efficient
exchange of financial assets
that ensures smooth flow of
funds from surplus savings unit
to deficit savings units

Functions of Finance Managers


- AAA
- P = f (c,m,e)
- Routine Functions
- Specific Functions
- Minimize the cost of Capital
- Minimize risk and maximize returns

ISSUES TO BE COVERED
overview of course outline and introduction to

financial management
Financial Statement Analysis and Financial
and Operating Leverage
Fundamental financial theory on Risk and
Rates of Return
Time Value of Money and Annuity Concepts
Valuation of Securities and Review before Mid
Term Test
Mid Term Test and Cost of Capital

ISSUES TO BE COVERED
Introduction to Capital Budgeting and Cash

flow Estimation
Incorporating Risk in Capital Budgeting
Capital Structure of a Firm Theory and
Policies
Working Capital Management
Dividend Policy
Term Paper Presentation and Pre-Final

THANK YOU