Financial Management/Advance Financial Management

Financial Management/Advance Financial Management

1. 305FIN-Advance Financial Management Unit-1 Financial Planning and Shareholder Value: Unit-2 Capital Structure and Firm Value: Unit-3 Investment Decisions: Unit-4 Working Capital Management: Unit-5 Dividend Policy and Firm Value: Total Marks= 100 , (50+50) Note: The weight age in the question paper shall be as follows: Numerical problems: 60% & Theory: 40%

2. Overview.. What is Financial Management ? Financial management involves planning, organizing, directing, and controlling the financial activities of an organization including procurement and utilization of the funds. It applies the general principles of management to the financial resources in order to maximize the financial gains of organizations.

3. SCOPE OF FINANCIAL MANAGEMENT All decisions that have monetary benefit come under the purview of financial management. There are basically, two approaches for understanding the scope of financial management: one is traditional approach and the second one is the modern approach .

4. 1.Traditional approach: 1. Traditional approach: Traditional approach views the scope of finance function in a narrow sense of arrangement of funds by business firm to meet their financing needs.

5. Cont… Hence, the following three inter-related aspects of raising and administering financial resources were covered : (a) Arrangement of finance from institution; (b) Raising funds in the capital market through financial instruments including the procedural aspects; (c) Legal and accounting aspects involved for raising finance for the firm.

6. 2. Modern Approach: The modern approach views the term financial management in a broad sense and provides a conceptual and analytical framework for financial decision making. Therefore, financial management, in the modern sense of the term, can be related to three major decision making areas.

7. Cont.. They are as follows: 1. Investment Decision i.e. Where to invest funds and in what amounts? 2. Financing Decisions i . e .Where to raise funds from and in what amount? 3. Dividend Decisions i . e How much of profits should be paid by way of dividends and how much should be retained in the business? Note-All the above three decisions contribute towards the goal of wealth maximization

8. Advance financial management:- (Safeguard the Future ) Advanced financial management helps organizations protect their funds in order to achieve future business objectives. Note: Intention is ..to have in-depth knowledge of Financial Management using some advance techniques.

9. In o ther words , Advance Financial Management means: To apply relevant - knowledge , skills and exercise professional judgment as expected of a senior financial executive or advisor, in taking or recommending decision relating to the financial management of an organization.

10. Thank You