Professional Documents
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FINANCE
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Financial Management deals with
procurement of funds and their efective
utilization in business.
Financial Management is concerned with
efective use of an important economic
resource, namely capital funds.
Kuchal S.C:
Ezra
Solomon:
Routine Function
Executive Functions
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Decision Making
Elimination Of Waste
Importance Of
Financial Planning.
Coordination
Communication
Dynamism
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Weston
and
Bringha
m
R.H.
Wessel
John H.
Hampto
n
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Internal factors
1. Requirement Of
Capital.
2. Size & Name Of
Business
3. Growth Of
Business Firm
4. Adequate &
Stable Earning
5. Cash Position
6. Period Of
Finance
7. Future Plan
8. Trading On
External factors
1.
2.
3.
4.
5.
6.
7.
8.
Market Conditions
Attitude Of Investors
Cost Of Capital
Government Regulations
Attitude Of Financial Institutions
Rate Of Interest
Taxation
Competition
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FIXED CAPITAL
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WORKING CAPITAL
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Production cycle
Term of purchase and
sale control
Credit
Growth and expansion
Management ability
External factors
Requirement of cash
Seasonal fluctuation
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KEY TERMS
Business finance : Corporation finance or
financial management
Financial management : Management of
business funds.
Forecasting of finance : Budgeting financial needs.
Profit maximization: Principle of business that
aims at making
maximization profit.
Wealth maximization : The maximization of
market prices of shares.
Financial planning : Advance programming of
financial plan.
Capital structure : Composition of capital.
Trading on equity : Use of borrowed funds for
financing business.
Capital gearing
: Ratio between debt capital &
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