Financial Management
Financial management study material
(Reference: Financial management by S.N.Maheshwari, Financial management by I.M. Pandey , Financial management by Prassana
Chandra & Anna university study material)
Unit – I
FOUNDATIONS OF FINANCE
Financial management: An Overview Time value of money introduction to the concept of risk and return of a single asset and of a portfolio, valuation of bounds and shares – option valuation
OBJECTIVES AND FUNCTIONS OF FINANCIAL MANAGEMENT
Maximization of the wealth of equity share holders appears to be the most appropriate goal for financial decision making. Apart from the main goal other alternatives have been suggested (ie) maximization of profit, maximization of earnings per share, maximization of return on equity. 2
Compiled by Jenisha , Department of Management Studies, VINS Christian College
MEANING OF FINANCIAL MANAGEMENT According to soloman
“Financial Management is concerned economic resource namely capital funds”. Financial management is mainly concerned with the proper management of funds. The financial manager must see that the funds are procured in a manner that the risk cost and control considerations are property balanced in a given situation and there is optimum utilization of funds OBJECTIVES OF FINANCIAL MANAGEMENT
Basic objectives
The basic objectives of financial management are the maintenance of liquid assets and maximization of the profitability of the firm.
Maintenance of Liquid assets Maintenance of liquid assets means that the firm has adequate cash in hand to meet 15 obligations at all times
Maximization of profitability A business firm is a profit seeking organization. Hence profit maximization is also well considered to be an important objective of financial management.
3
Compiled by Jenisha , Department of Management Studies, VINS Christian College
Wealth maximization The objective is also consistent with the objective of maximizing the economic welfare of the shareholders
(Reference: Financial management by S.N.Maheshwari, Financial management by I.M. Pandey , Financial management by Prassana
Chandra & Anna university study material)
Unit – I
FOUNDATIONS OF FINANCE
Financial management: An Overview Time value of money introduction to the concept of risk and return of a single asset and of a portfolio, valuation of bounds and shares – option valuation
OBJECTIVES AND FUNCTIONS OF FINANCIAL MANAGEMENT
Maximization of the wealth of equity share holders appears to be the most appropriate goal for financial decision making. Apart from the main goal other alternatives have been suggested (ie) maximization of profit, maximization of earnings per share, maximization of return on equity. 2
Compiled by Jenisha , Department of Management Studies, VINS Christian College
MEANING OF FINANCIAL MANAGEMENT According to soloman
“Financial Management is concerned economic resource namely capital funds”. Financial management is mainly concerned with the proper management of funds. The financial manager must see that the funds are procured in a manner that the risk cost and control considerations are property balanced in a given situation and there is optimum utilization of funds OBJECTIVES OF FINANCIAL MANAGEMENT
Basic objectives
The basic objectives of financial management are the maintenance of liquid assets and maximization of the profitability of the firm.
Maintenance of Liquid assets Maintenance of liquid assets means that the firm has adequate cash in hand to meet 15 obligations at all times
Maximization of profitability A business firm is a profit seeking organization. Hence profit maximization is also well considered to be an important objective of financial management.
3
Compiled by Jenisha , Department of Management Studies, VINS Christian College
Wealth maximization The objective is also consistent with the objective of maximizing the economic welfare of the shareholders