What is Financial Management ?

Financial Management


What is Financial Management?

Welcome to the session on understanding Financial Management…

Financial Management

let’s start with an example – let’s assume we are going to start a business when you start a business you should have an idea you should decide what are the assets that are required then you should be in a position to estimate.

what is the total cost of those assets so only if you have these two you will be able to start the business that is you should know.

what are the assets required then the cost but this alone is not sufficient, if you want to run the business on daily basis you should know, what is the cash required, So now you have a fair idea about the cash required for starting a business and running a business?

Then, What you should do you should identify sources that are sources have to be tapped for funding your business assets and funding your working capital these sources can be from the owner’s pockets that are it can be owners funds or it can also be from outside whether you raise the money from owners pockets or outsiders.

What you have to ensure is the cost of these funds are as low as possible only then the profits of the business will be at its maximum so we can say financial management is mainly concerned with financing the business, I mean arranging funds so that those funds can be allocated in an effective manner for asset creation for working capital purposes and all these are done with an intention to maximize the profit for the owners, So we can say financial management is concerned with financing decisions.

All location decisions and profit distribution we call it as dividend decision so to put it in a nutshell financial management is concerned with financing decisional location of funds and the good at the decision.

The Types of Financial Management      

1.            Capital budget management:- Capital budgeting is the planning procedure used to decide if a company fixed assets, For example, the new plant, new machinery. Numerous formal strategies are utilized in capital budgeting for example profitability index, payback period.

2.            Capital structure management:- In corporate finance capital structure manner in which a company finances through a mix of debt or equity securities. Debt financing comes as a bond issue, while equity comes from retained earnings or as a stock.

3.            Working capital management:- Working capital management of an organization refers to managing bookkeeping methodology and accounting strategies intended to keep track of current assets, current liabilities.

The objective of Financial Management

Financial control is one of the functional regions of business. Therefore, its targets must be constant with the overall objectives of the business. The overall goal of financial management is to provide maximum go back to the proprietors on their funding inside the long- term.

This is known as wealth maximization. Maximization of owners’ wealth is possible when the capital invested first of all will increase over a duration of time. Wealth maximization approach maximizing the market price of an investment in shares of the company.

A wealth of shareholders = Number of shares held ×Market price per share.

The function of Financial Management

1. Estimating the Financial Amount of Capital Required:

This is the foremost function of the financial manager. Business firms require capital for:

(i) purchase of fixed assets,

(ii) meeting working capital requirements, and

(iii) modernization and expansion of the business.

The financial manager makes estimates of funds required for both the short-term and long-term.

2. Deciding Capital Structure: The capital structure refers to the kind and proportion of the different securities for raising funds. After deciding on the quantum of funds required it should be determined which type of security should be built. Financing fixed securities through long-term debts may be wise. Long-term funds should be employed to finance working capital also. The decision about various sources of funds should be linked to the cost of raising funds. If the cost of raising funds is high, then such sources may not be useful.

3. Ascertains capital composition: Once the estimation of capital requirement has been made with the best effort, the capital structure of the enterprise has to be decided. This involves the analysis of short- term and long- term debt-equity. This will depend on the proportion of possessed equity capital a company and other additional funds that have to be raised from outside parties through borrowing.

4. INVESTMENT DECISIONS- Investment decisions involve the utilization/application of funds in the right mix of projects and fixed assets to maximize the returns for the organization. There are various techniques used like Net Present Value, Internal Rate of Return, and Payback Period, etc.

5. Management of cash: The finance manager has to make decisions with regards to cash management. Cash is required for many purposes like payment of wages and salaries, payment of electricity and water bills, payment to creditors, meeting current liabilities, maintenance of enough stock, purchase of raw materials, etc.

6. Financial controls: The finance manager has not only to plan, procure and utilize the funds but he also has to exercise control over finances. This can be done through many techniques like ratio analysis, financial forecasting, cost and profit control, etc.

 7. Investment of funds: The finance manager has to decide to allocate funds into profitable ventures so that there is safety on investment and regular returns are possible.

To know more- Click here

CA Inter Audit – Notes | Study Material | Course | Syllabus

CA Inter Audit and Assurance

CA Inter Auditing and Assurance

CA Inter Audit Pendrive Classes – 5500

CA Inter Audit Google Drive Classes – 5000

If Student Buy This Course in Google Drive Use This Coupon Code – GD500

If Student Buy Mobile Application Classes- Click Here

Are you find the best CA Inter Auditing and Assurance teacher, Our faculty Mr. CA. Ankit Varshney is the best for Auditing and Assurance. CA. Ankit Varshney also provides CA inter Auditing and Assurance classes in the Old course & New course.

CA Inter Audit Classes

Package Name (Exam Name and Subject Name)CA IPC Audit
CourseCA
Syllabus (Old / New)Old
Study Material Provided inHard Copy
For Hard Copy Study Material, provide details (e.g. No. of Books, Hand Written Books, Colorful Books, Xerox Copies, No. of pages, etc)2
Final Selling Price (Inclusive of All Taxes)6000
Applicable for the AttemptNov 2019
Faculty NameCA Ankit Varshney
Total No. of Lectures41
Total No. of Hours75
Video LanguageHindi
Topics Coveredas per ICAI Guidelines
How the Doubt clearing session will be available?SMS/Whatsapp/Telegram

CA Inter Auditing & Assurance in Demo Classes

CA Inter Auditing and Assurance

CA Inter Audit Subjects

Audi and Assurance Chapters
CA Inter Audit
Chapter 1 –Nature of Auditing
Chapter 2 –Basic Concept in Auditing
Chapter 3 –Preparation for an Audit
Chapter 4 –Audit Sampling & Risk
Chapter 5 –Internal Control
Chapter 6 –EDP Audit
Chapter 7 –Vouching
Chapter 8 –Verification
Chapter 9 –Company Audit –I
Chapter 10 –Company Audit –II
Chapter 1 1-Audit Report
Chapter 1 2-Governmental Audit
Chapter 1 3-Special Audit
Chapter 1 4-Standard on Audit

CA Inter Audit Study Material & Syllabus

About CA Inter Auditing and Assurance (New Course & Old Course) Teacher – CA.Ankit Varshney

CA Ankit Varshney is a Commerce Graduate from (MJP Rohilkhand University, Bareilly(UP)) who cleared CA at a very young age which completed in 2011.

He has excellent knowledge and a thorough understanding of CA Intermediate and Audit courses, as well as the complex Taxation courses.

With more than 8+ years of experience, he has treated more than 8000 CA, CS and CMA courses students through face-to-face and pen drive classes.

A teacher known for inspiring youth, he focuses on innovative education, training, and career development for tomorrow’s workforce. Teachers with his humorous way to make.

CA Inter Audit FAQ (Frequently Asked Question)

Question 1:- What is audit ICAI?

Answer:- The Institute of Chartered Accountants of India (ICAI) is the national professional accounting body of India. … ICAI is solely responsible for setting the Standards on Auditing (SAs) to be followed in the audit of financial statements in India.

Question 2:- How do I prepare for audit CA Inter?

  1. Go through the modules once, all chapters.
  2. Read and revise the practice manual, again and again, many questions are asked from PM directly, focus on practice manual questions.
  3. Remember SA’s list, you should be able to quote it in answers.

Question 3:- Is ICAI study material enough for CA Intermediate?

Answer:- YES. At the IPCC level, the Institute’s study material and practice manual is more than enough to pass with flying colors. Those who have cleared CPT (Entry-level Exam of CA), must be aware that We Do not actually learn any new subject Except Mercantile Law at CPT level.

×