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Financial Management: MBA NOTES

FINANCIAL MANAGEMENT

DEFINITION:
"Financial management" refers to managing the finances, analyze for-cost and plan the finances access risk, decide, when and where the finances are generated evaluate and select the investment oppertunites decide, how much money should be return to the investor, or shareholders.
OR
Managing the finances is called "financial management"

RETURN:
The extra amount which we received on principal amount is called return.

Return = Dividend + Capital Gain

RISK:
The fluctuation in return is called risk.

SHARE:
Share is a piece of paper on which the company acknowledge the funds.

SOURCES OF FINANCE:
1. DEBT FINANCE (LOAN FORM BANK)
2. EQUITY FINANCE (OWNER, SHAREHOLDER)

SHAREHOLDER:
The person who purchase the share is shareholder.

STAKEHOLDERS:
The person who directly or indirectly attached with the business is called stakeholders
Example:
suppliers, owner, buyer etc.

DIVIDEND:
That part of profit which is distributes among the shareholders

CAPITAL GAIN:
The increase in the price of share is called "capital gain".

Capital Gain = Sales price - Purchase price


FINANCIAL MANAGEMENT
DECISION AREA OF FINANCIAL MANAGEMENT
AGENCY PROBLEM
TYPES OF BUSINESS
FINANCIAL SYSTEM
FINANCIAL INTERMEDIARIES
TYPES OF FINANCIAL MARKETS
TIME VALUE OF MONEY
EXAMPLES AND FORMULA TIME VALUE OF MONEY
CASH FLOW,SUM,SERIES OF CASH, ANNUITY AND MIX STREAM
ANNUITY TYPES AND FORMULA
AMORTIZATION SCHEDULE OR TABLE WITH EXAMPLE
EFFECTIVE INTEREST RATE WITH EXAMPLE
VALUATION OF LONG TERM SECURITIES (BONDS)
TYPES OF BONDS
BONDS FORMULA,ZERO COUPON PERPETUAL
VALUATION OF LONG TERM SECURITIES (SHARE)
CASH AND MARKETABLE SECURITIES MANAGEMENT
MANAGING CASH INFLOW AND OUTFLOW
SECURITIES MANAGEMENT
SHORT TERM FINANCING
SPONTANEOUS LABILITIES
NEGOTIATED FINANCE
CAPITAL BUDGETING
CAPITAL BUDGETING TECHNIQUE
NET PRESENT VALUE TECHNIQUE
INTERNAL RATE OF RETURN TECHNIQUE
ACCOUNT RECEIVABLE MANAGEMENT
INVENTORY MANAGEMENT
FORCASTING



MBA NOTES FINANCIAL MANAGEMENT
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