Neeraj Fm Ppt

7/28/2019 Neeraj Fm Ppt

http://slidepdf.com/reader/full/neeraj-fm-ppt 1/10

Prestige Institute Of Management

& Research

Topic:-

Submitted By:-Neeraj

Raghuwanshi

Amit Baghel

Lokesh singh PatelNeeraj swamy

Submitted To:-

Prof. Saroj prasad

The Role of the Financial Manager



What is Financial

Management?

Concerns the acquisition,

financing, and management of assets with some overall

goal in mind.



The Goal of the Financial

Manager

The goal of the financial manager must be consistent with themission of the corporation.• To maximize firm value shareholder ’s wealth (as measured

by share prices).

While managers have to cater to all the stakeholders (such as

consumers, employees, suppliers etc.), they need to payparticular attention to the owners of the corporation, i.e.,shareholders.

If managers fail to pursue shareholder wealth maximization,they will lose the support of investors and lenders. The

business may cease to exist and ultimately, the managers will losetheir jobs!



The Role of

Financial Management

What is Financial Management?

The Goal of the Firm

Corporate Governance

Organization of the Financial Management

Function



Investment Decisions

What is the optimal firm size?

What specific assets should be acquired?

What assets (if any) should be reduced or

eliminated?

Most

important of the three

decisions.



Financing Decisions

What is the best type of financing?What is the best financing mix?

What is the best dividend policy (e.g.,dividend-payout ratio)?How will the funds be physically acquired?

Determine how the assets (LHS of

balance

sheet) will be financed (RHS of

balance sheet).



Asset Management

Decisions

How do we manage existing assets

efficiently ?

Financial Manager has varying degrees of operating responsibility over assets.

Greater emphasis on current asset

management than fixed assetmanagement.



What is the Goal

of the Firm?

Maximization of

Shareholder Wealth!

Value creation occurs when we maximize

the share price for current shareholders.



The Four Basic Principles of Finance1. Money has a time value.

A dollar received today is more valuable than a dollar received in the future(due to interests, investment returns,…)

2. There is a risk-return trade-off. One shall take extra risk only if one expects to be compensated for extra

return.

3. Cash flows are the source of value. Profit is an accounting concept designed to measure a business’s

performance over an interval of time.

Cash flow is the amount of cash that can actually be taken out of thebusiness over this same interval.

4. Market prices reflect information. Investors respond to new information by buying and selling their

investments.



Thank You

Neeraj Fm Ppt

Documents

Transcript of Neeraj Fm Ppt