Dr. R.A.N.M ARTS AND SCIENCE COLLEGE�Affiliated to Bharathiar University , �Accredited with “ B+” NAAC
Mrs. S. Bibi Fathima M.Com.,M.Phil.,� Assistant Professor,� Department of Commerce (CA)
Course Name : Financial & Investment Management
�Welcome You All
FINANCIAL MANAGEMENT:
Financial management, is that branch of general management, whichhas grown to provide specialized and efficient financial services to the wholeenterprise; involving, in particular, the timely supplies of requisite finances andensuring their most effective utilization-contributing to the most effective and efficient attainment of the common objectives of the enterprise.
OBJECTIVES OF FINANCIAL MANAGEMENT
Main objective
Other objective
FINANCIAL DECISION
Financial decision is a process which is responsible for all the decisions
related with liabilities and stockholder’s equity of the company as well as the
issuance of bonds.
To make a good Financial Planning Process you have to follow these six
steps:
1. Determine current financial situation
2. Establish financial goals
3. Identify different courses of action
4. Evaluate alternatives
5. Elaborate and implement the actions of the financial plan
6. Review and revise the financial plan.
RELATIONSHIP BETWEEN RISK AND RETURN
Relationship between risk and return means to study the effect of
Both elements on each other. We measures the effect of increase or decrease risk
on return of investment. Following is the main type of relationship of risk and
return.
Risk-Return relationship model
1. Direct Relationship between Risk and Return
(A) High Risk - High Return
(B) Low Risk - Low Return
2. Negative Relationship between Risk and Return
(A) High Risk Low Return
(B) Low Risk High Return
SOURCE OF FINANCE:
Sources of finance for business are equity, debt, debentures, retained
earnings, term loans, working capital loans, letter of credit, euro issue, venture
funding etc. These sources of funds are used in different situations. They are
classified based on time period, ownership and control, and their source of
generation. It is ideal to evaluate each source of capital before opting for it.
Long term finance:
1. Share Capital or Equity Shares
2. Preference Capital or Preference Shares
3. Retained Earnings or Internal Accruals
4. Debenture / Bonds
5. Term Loans from Financial Institutes, Government, and Commercial
Banks
6. Venture Funding
Short term finance:
1. Trade Credit
2. Factoring Services
3. Bill Discounting
4. Advances received from customers
5. Short Term Loans like Working Capital Loans from Commercial
Banks
6. Fixed Deposits