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M.S.RAMAIAH MANAGEMENT INSTITUTE

M.S.RAMAIAH MANAGEMENT INSTITUTE. -: PRESENTATION :- FINANCIAL MANAGEMENT -: GROUP MEMBER :- Pramodkumar Jaju Pawan Gupta Sahanawaz Ahamad. 1. Role of finance manager ?.

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M.S.RAMAIAH MANAGEMENT INSTITUTE

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  1. M.S.RAMAIAH MANAGEMENT INSTITUTE -: PRESENTATION :- FINANCIAL MANAGEMENT -: GROUP MEMBER :- Pramodkumar Jaju Pawan Gupta Sahanawaz Ahamad

  2. 1.Role of finance manager ? 1. Forecasting and estimating capital requirements: 2. Designing the capital structure: 3. Mobilization of funds: 4. Deployment of funds: 5. Control over the use of funds: 6. Dividend decision: 7. Cash management: 8. Evaluating financial performance: 9. Financial negotiations: 10. Maintaining relations with outside agencies: 11. Cost control: 12. Product pricing:

  3. 2.Business finance decisions ? Business finance is concerned with making decisions about which investments the firm should make and how best to finance those investments. Thus business finance function deals with three major decisions :- 1.The Investment decision. 2.The Financing decision. 3.The dividend policy decision.

  4. Investment decision Capital budgeting Cost of capital Measuring risk Management of liquidity and current assets. Decisions on lease/hire purchase of machines and equipments. Buy or hire or lease an asset. Decisions on merger and acquisition.

  5. Financing Decisions Deciding the financing pattern of long term, medium term and short term funds requirement Decision regarding choice of financial instrument (equity shares,preference shares,bonds,debentures etc) Arrangement of funds from banks and financial institutions for working capital and other needs Decision regarding proper balance between debt and equity in the capital structure. Decision in what proportion should funds be raised to maximize the return to the shareholders.

  6. 3.Introduction of ratio analysis ? A financial ratio is a relationship between two accounting numbers. Ratios help to make a qualitative judgment about the firm’s financial performance.

  7. Types of Financial Ratios Liquidity ratios Solvency ratios Turnover ratios Profitability ratios Equity-related ratios

  8. Liquidity Ratios Liquidity ratios measure a firm’s ability to meet its current obligations.

  9. Solvency Ratios Solvency ratios measure the dependence of a firm on borrowed funds.

  10. Turnover Ratios Turnover or activity ratios measure the firm’s efficiency in utilizing its assets.

  11. Profitability Ratios Profitability ratios measure a firm’s overall efficiency and effectiveness in generating profit.

  12. Equity-related Ratios Equity-related ratios measure the shareholders’ return and value.

  13. Thanking you

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