Practice Ethical Behavior

Practice Ethical Behavior * The Institute of Management Accountants lists the principle of ethical behavior as the "...obligation to the public, their profession, the organization they serve, and themselves, to maintain the highest standards of ethical conduct" that include competence, confidentiality, integrity and objectivity.
Don't Risk Without Significant Return * Risking profits for poorly designed projects violates a basic principle of financial management. The capital market theory of financial management involves increased return with less risk. Mathematical formulas calculate the risk. * Sponsored Links * IPFC IMA 2 paper CMA(US)
Not all have the patience to study for 14-16 paper accounting exams www.ifcpltd.com/[phone] Design a Realistic Budget *
Realistic budgeting involves a master budget and separate capital and operating budgets. Budgets translate the objectives into detailed plans, according to the International Agricultural Research Centers of the World Bank.
Safeguard Against Loss * Financial management requires instituting safeguards against losses. Safeguards vary with individual projects. While safeguards are not foolproof, a set of safeguards must be in place.
Expect Competitive Markets * Projects operate in the middle of the market and face competition from other financial projects.
Management must plan for competitive markets in soliciting funding and marketing a product or service.
Locate Efficient Capital Markets * Capital is money placed in an investment. Capital markets involve long-term financing for investments. Location of funds for both short- and long-term investment is required for sound financial management.
Locate Quality Managers * Financial management requires flexibility in dealing with the unknowns. Quality, competent managers handle "a vast range of unknowns," according to Geoffrey T. Boisi, former administrator at J.P. Morgan, Chase and Company and office holder at the Beacon Group investment banking firm.
Monitor and Evaluate Financial Data * Changing interest and exchange rates and also equity and commodity prices requires savvy financial management, according to Charles S. Tapiero in his text "Risk and Financial Management: Mathematical and Computational Methods," published in 2004. Tapiero stresses the importance of using new math and financial data evaluation techniques in financial management.
Vary Risk With the
Venture * Analysis of the operational model, market and financial model determine the risk of a venture, according to Jay Ebben, Ph.D., associate professor in the Schulze School of Entrepreneurship at the University of St. Thomas.
Use Cash as a Basis for New Projects * Cash is critical to financial management. New projects based on cash may conflict with current operating projects, but the opportunities for earnings override those concerns.

Read more: Ten Principles That Form the Basics of Financial Management | eHow.com http://www.ehow.com/list_6639919_ten-form-basics-financial-management.html#ixzz2BXKUvO83 http://www.ehow.com/list_6639919_ten-form-basics-financial-management.html Basic Principles of Finance
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10 Principles of Financial Management

PRINCIPLE 1: The risk-return trade off
– Investors won’t take additional risk unless they expect to be compensated with additional return.
PRINCIPLE 2: Time Value of Money
– A dollar received today is worth more than a dollar received a year from now. Because we can earn interest on money received today, it is better to receive money earlier rather than later.
PRINCIPLE 3: CASH, not profits is KING
– It is cash flows not profits that are actually received by the firm and can be reinvested.
PRINCIPLE 4: Incremental Cash Flows
– It's only what changes that counts. The incremental cash flow is the difference between the cash flows if the project is taken on versus what they will be if the project is not taken on.
PRINCIPLE 5: The Curse of Competitive Markets
– This is why it's hard to find exceptionally profitable projects. In competitive markets, extremely large profits cannot exist for very long because of competition moving in to exploit those large profits. As a result, profitable projects can only be found if the market is made less competitive, either through product differentiation or by achieving a cost advantage.
PRINCIPLE 6: Efficient Capital Markets
– The markets are quick and the prices are right. An efficient market is characterized by a large number of profit-driven individuals who act independently.
PRINCIPLE 7: The Agency Problem
– A problem resulting from conflicts of interest between the manager/agent and the stockholder. Managers won't work for the owners unless it's in their best interest. The agency problem is a result of the separation between the decision makers and the owners of the firm. As a result managers may make decisions that are not in line with the goal of maximization of shareholder wealth.
PRINCIPLE 8: Taxes Bias Business Decisions
– The cash flows we consider are the after-tax incremental cash flows to the firm as a... http://www.termpaperwarehouse.com/essay-on/Basic-Principles-Of-Finance/33518 Ten principles of finance are listed and explained in this ahort lecture.
Principle 1. The risk-return trade-off
Principle 2. The time value of money
Principle 3. Cash—Not Profits—is King
Principle 4. Incremental cash flows
Principle 5. The curse of competitive markets
Principle 6. Efficient Markets
Principle 7. The Agency Problem
Principle 8. Taxes bias business decisions
Principle 9. All risk is not equal
Principle 10. Ethical dilemmas persist