Financial Management 202

• Corporate finance is a specific area of finance that analyzes the financial decisions of corporations.
• Managerial finance concerns the acquisition, financing, and management of assets with some overall goal in mind.
• Business Finance is that activities which is concerned with the acquisition and conservation of capital funds in meeting the financial need and overall objective of business enterprise. (B.O. Wheeler)
• Financial Management is a decision making process concerned with: Planning, Acquiring and Utilizing funds.
• Business finance is concerned with the sources of funds available to enterprise of all sizes and the proper use of money or credit obtained room such sources. (Dr. R.E. Gloss and Dr. H. Baker)
• A fund is a pool of money set aside for a specific purpose. Some common types of funds include pension funds, insurance funds, foundations, and endowments.
• Financial Management is described as the process for and the analysis of making financial decisions in the business context. It is a larger discipline called finance which is a body of: facts, principles, and theories relating to using and raising money by individual, business, and governments.
• The goal of financial Management is simply to make money and value for the owners.
• The primary goals of FM is a process that enables a business to: plan, direct, organize, monitor, and control its current and future financial resources and events.
• The financial manager in a business enterprise must make decision for the owners of the firm.
• The goal of financial Management is to maximize the current value per share of the existing stock or ownership in a business firm.
• The scope of financial Management is primarily concerned with acquisition, financing, and management of assets of business concern im order to maximize the wealth of the firm for it's others.
• Functions of financial manager ( modern approach): to analyze the business firm and determine the following: a. The total funds requirements of the firm b. The assets or resources to be acquired and c. The best pattern of financing the assets.
• The three major types of decision that the finance manager: investment decisions, financing decisions, dividend decisions
• Investment decisions are those which determine how scarce of limited resources in terms of funds of the business firms are committed to projects.
• Investment decisions should also consider the profitability of each individual project proposal that will contribute to the overall profitability of the firm and lead to the creation of wealth.