Tag Archives | Financial Management

Risk and Return in Financial Planning | Company

In this article we will discuss about the risk and return faced while financial planning of a company. Costing and Risk: The word ‘costing’ relates to the ascertainment of cost of capital from different sources like equity capital, preference capital, debentures, long-term loans etc. The most crucial decision of any company is involved in the […]

Impact of Depreciation on Financial Management

In this article we will discuss about the impact of depreciation on financial management. Depreciation is the measure of wearing out, consumption or other loss of value of a fixed asset. It may arise from use of asset, affluxion of time, obsolescence through technology and market changes etc. The cost of a product should consist […]

Top 8 Techniques of Financial Management

The important techniques of financial management are summarized as follows:- 1. Common-Size Statements 2. Trend Ratios 3. Funds Flow Analysis 4. Cash-Flow Analysis 5. Ratio Analysis 6. Working Capital Management 7. Capital Structure 8. Capital Budgeting Techniques. Technique # 1. Common-Size Statements: The common-size financial statements are those in which figures reported are converted into […]

Top 6 Categories of Ratio Analysis | Firm

The following points highlight the top six categories of ratio analysis. The categories are: 1. Liquidity Ratios 2. Leverage Ratios 3. Asset Management Ratios 4. Profitability Ratios 5. Operating Ratios 6. Market Based Ratios. Category # 1. Liquidity Ratios: The liquidity ratios measure the liquidity of the firm and its ability to meet its maturing […]

Du Pont Analysis | Financial Management

The below mentioned article provides a note on du pont analysis. The Du Pont company of USA has introduced a system of financial analysis which has received a wider acceptance. The Du Pont Chart is a chart of financial ratios, which analyses the net profit margin in terms of asset turnover. The Du Pont analysis […]

3 Main Approaches to Financial Management | Management

The following points highlight the three main approaches to financial management. The approaches are: 1. Traditional View 2. Modern View 3. Liquidity and Profitability. Approach # 1. Traditional View: Financial management is primarily concerned with acquisition, financing and management of assets of business concern in order to maximize the wealth of the firm for its […]

Time Value of Money | Financial Management

In this article we will discuss about:- 1. Calculation of Interest Rates and Discounting of Cash-Flows 2. Term Structure and Interest Rates. Calculation of Interest Rates and Discounting of Cash-flows: Time Value of Money: The value of money received today is different from the value of money received after some time in the future. An […]

Reasons for Centralizing Finance Function

The argument in favour of centralizing the finance function is based on the following reasons:- 1. Strategic Decisions 2. Cash-Flow 3. External Orientation 4. Coordination 5. Financial Discipline 6. Information Flow. Reason # 1. Strategic Decisions: Many of the strategic decisions like setting up of financial goals, investment in capital projects, raising of finances through […]

Funds Flow Statement and Income Statement | Financial Management

The funds flow statement and income statement have different functions and their main differences are summarized below: Difference # Funds Flow Statement: 1. Funds flow statements main objective is to ascertain the funds generated from operations. It reveals the sources of funds and their applications. 2. Funds flow statement is prepared based on the financial […]

Top 20 Functions of Financial Controller

The following points highlight top twenty functions of a financial controller in a large business. The functions are: 1. Provision of Capital 2. Investor Relations 3. Short-Term Financing 4. Banking and Custody 5. Credit and Collections 6. Insurance 7. Investments 8. Planning for Control 9. Reporting and Interpreting 10. Evaluating and Consulting 11. Tax Administration […]

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