Financial Management - University of Al-Qadisiyah
Preface
Financial Management is an essential part of the economic and non economic activities which leads to decide the efficient procurement and utilization of finance with profitable manner. In the olden days the subject Financial Management was a part of accountancy with the traditional approaches. Now a days it has been enlarged with innovative and multi dimensional functions in the field of business with the effect of industrialization, Financial Management has become a vital part of the business concern and they are concentrating more in the field of Financial Management. Financial Management also developed as corporate finance, business finance, financial economics, financial mathematics and financial engineering. Understanding the basic concept about the financial management becomes an essential part for the students of economics, commerce and management.
This book provides detailed information about the finance and finance related area with simple language and the concepts are explained with easy examples. This book is also prepared based on the ., B.B.A., B.B.M., ., and M.B.A. syllabus of various universities for the benefits of the students.
AUTHORS
Contents
Preface
1 CHAPTER - INTRODUCTION TO FINANCIAL MANAGEMENT
Introduction Meaning of Finance Definition of Finance Definition of Business Finance Types of Finance Definition of Financial Management Scope of Financial Management Objectives of Financial Management ? Profit maximization ? Favourable arguments for profit maximization ? Unfavorable arguments for profit maximization ? Drawbacks of profit maximization ? Wealth maximization ? Favourable arguments for wealth maximization ? Unfavourable arguments for wealth maximization Approaches to Financial Management ? Traditional approach Functions of Finance Manager Importance of Financial Management ? Financial planning ? Acquisition of funds ? Proper use of funds ? Financial decision ? Improve profitability
(v)
1?10
1 1 1 2 2 3 4 5 5 6 6 6 6 7 7 7 8 8 9 9 9 10 10 10
? Increase the value of the firm ? Promoting savings Model Questions
2 CHAPTER - FINANCIAL STATEMENT ANALYSIS
Introduction Meaning and Definition ? Income statement ? Position statement ? Statement of changes in owners equity ? Statement of changes in financial position Types of Financial Statement Analysis Techniques of Financial Statement Analysis ? Comparative statement analysis ? Comparative balance-sheet analysis ? Comparative profit and loss account analysis ? Trend analysis ? Common size analysis Funds Flow Statement Cash Flow Statement ? Difference between funds flow and cash flow statement Ratio Analysis ? Liquidity ratio ? Activity ratio ? Solvency ratio ? Profitability ratio Model Questions
3 CHAPTER - SOURCES OF FINANCING
Introduction ? Long-term financial requirements or Fixed capital requirement ? Short-term financial requirements or Working capital requirement Sources of Finance Security Finance ? Characters of security finance ? Types of security finance ? Ownership securities Equity Shares ? Features of equity shares ? Advantages of equity shares ? Disadvantages of equity shares Preference Shares ? Irredeemable preference shares
Contents
10 10 10
11?24
11 11 12 12 12 12 13 14 15 15 16 17 17 18 19 19 20 21 21 22 22 24
25?39
25 25 25 26 28 28 28 28 28 28 29 30 30 31
Contents
? Participating preference shares ? Non-participating preference shares ? Convertible preference shares ? Non-convertible preference shares ? Features of preference shares ? Advantages of preference shares ? Disadvantages of preference shares Deferred Shares No Par Shares Creditorship securities ? Debentures ? Types of debentures ? Features of debentures ? Advantages of debenture ? Disadvantages of debenture Internal Finance ? Depreciation funds ? Retained earnings ? Advantages of retained earnings ? Disadvantages of retained earnings Loan Financing ? Financial institutions ? Commercial banks ? Short-term loans ? Development banks Model Questions
4 CHAPTER - CAPITALIZATION
Introduction Meaning of Capital ? Fixed capital ? Definition of fixed capital ? Character of fixed capital ? Working capital Capitalization ? Meaning of capitalization ? Definition of capitalization Types of Capitalization ? Over capitalization ? Causes of over capitalization ? Effects of over capitalization ? Remedies for over capitalization ? Under capitalization ? Causes of under capitalization
31 31 31 31 31 31 32 32 32 33 33 33 34 34 34 35 35 35 36 36 37 37 37 38 38 38
41?45
41 41 41 41 42 42 42 42 43 43 43 43 44 44 44 44
? Effects of under capitalization ? Remedies of under capitalization ? Watered capitalization ? Causes of watered capital
5 CHAPTER - CAPITAL STRUCTURE
Introduction ? Meaning of capital structure ? Definition of capital structure Financial Structure Optimum Capital Structure ? Objectives of capital structure ? Forms of capital structure Factors Determining Capital Structure ? Leverage ? Cost of capital Capital Structure Theories ? Traditional approach ? Assumptions ? Comments ? Net Income (NI) approach ? Net Operating Income (NOI) approach ? Modigliani and Miller approach Model Questions
6 CHAPTER - COST OF CAPITAL
Introduction 65 ? Meaning of cost of capital ? Definitions ? Assumption of cost of capital Classification of Cost of Capital ? Explicit and implicit cost ? Average and marginal cost ? Historical and future cost ? Specific and combine cost Importance of Cost of Capital ? Importance to capital budgeting decision ? Importance to structure decision ? Importance to evolution of financial performance ? Importance to other financial decisions Computation of Cost of Capital ? Measurement of cost of capital ? Cost of equity
Contents
45 45 45 45
47?64
47 47 47 48 49 49 49 50 50 50 50 51 51 53 53 55 58 64
65?82
65 65 66 66 66 67 67 67 67 67 67 68 68 68 68 68
................
................
In order to avoid copyright disputes, this page is only a partial summary.
To fulfill the demand for quickly locating and searching documents.
It is intelligent file search solution for home and business.
Related download
- chapter 1 introduction to finance
- business finance business finance mec
- introduction to accounting
- financial management university of al qadisiyah
- the basics of financial mathematics
- principles of finance
- applied corporate finance 3rd edition
- introduction to python
- an introduction to financial mathematics
- introduction to quantitative finance
Related searches
- examples of financial management goals
- importance of financial management pdf
- importance of financial management knowledge
- principles of financial management pdf
- university of scranton financial office
- types of financial management practices
- functions of financial management pdf
- department of the treasury financial management service
- office of financial management treasury
- fundamentals of financial management 14th
- university of scranton financial statements
- university of scranton financial aid