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

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