Introduction to

Financial Management
Chapter 1
 Meaning
Managerial activity concerned with the
planning and controlling of the firms
financial resources.

INTRODUCTION TO FINANCIAL
MANAGEMENT
 Scope of finance
Finance activity secures capital & employs it
through production and marketing activities
All these are called finance functions thes
constitute the scope of financial management
1. raising funds : equity & borrowed
2. Retaining earnings
3. Investment project
4. All the business activities
All these involves acquisition and use of money
directly
INTRODUCTION TO FINANCIAL
MANAGEMENT
 Responsibility of Financial
Management
Financial planning
Raising of funds
Controlling the use of funds
Disposition of profits (taxes, dividends retain earnings)
Efforts to maximise value
Responsibilities to the owner (keep financial health of
the firm)
Responsibilities to the employees
Wealth maximisation
Responsibilities of customers

INTRODUCTION TO FINANCIAL
MANAGEMENT
 Financial Goal
Profit verses wealth maximization
Profit maximisation
Shareholders wealth maximisation

INTRODUCTION TO FINANCIAL
MANAGEMENT