TYPE OF FINANCE

Finance Group

Short term Middle term long term

Four type of finance

• Self Financing:-Fund from private and family sources

• Debt Financing:- Borrowing money from others.

• Equity Financing:-By sale of an interest in the business.

• Other Financing:-Other sources such as Trusts and Grants.

PURPOSE OF FINANACEStart a new business.Buy a business.To buy asset such as plant and equipments.For working capital.To raise capital that can be return to share

holder or to the owner.To arrange fund to buy out a partner or a

share holder.

HIERARCHY OF FINANCE

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CEO

CFO DIRECTOR OF FINANCE ------------------------------------------------------------------

MANAGER ACCOUNT

MANAGER TAXATION

MANAGERFINANCE

MANAGERPAYROLL

A.MANANGER

A.MANANGER

A.MANANGER

A.MANANGER

EXECUTIVEACCONTENT

EXECUTIVEACCONTENT

EXECUTIVEACCONTENT

EXECUTIVEACCONTENT

MANAGEMENT TRAINEE

MANAGEMENT TRAINEE

MANAGEMENT TRAINEE

MANAGEMENT TRAINEE

Career Opportunities in Finance

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Corporate Finance Functions

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Financial Management

External Financing

Capital Budgeting

Corporate Governance

Risk Management

Corporate Finance

Functions

The Financial Management Function

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Managing firms’ internal cash flows, and its mix of debt and equity financing,to maximize the value of the debt and

equity claims on firms, and to ensure that companies can pay off their

obligations when they come due. Involves obtaining seasonal financing,

managing inventories, paying suppliers, collecting from customers, and investing surplus cash

The Risk Management Function

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Managing firms’ exposures to all types of risk,

both insurable (such as loss caused by fire or flood) and uninsurable,

in order to maintain optimum risk-return trade-offs and thereby maximize shareholder value.

Modern risk management focuses on adverse interest rate movements, commodity price changes, and currency value fluctuations.

The Capital Budgeting Function

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Capital Budgeting – selecting the best projects in which to invest the resources of the

firm, based on each project’s perceived risk and expected

return.

Select investments for which the marginal benefits exceed the marginal costs.

The Scope of Corporate Finance

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Financial managers should seek to maximize shareholders’ wealth.

How? By performing the five basic duties of corporate finance: External financing, capital budgeting, financial management, risk management, corporate governance.

Select investments for which the marginal benefits exceed the marginal costs.

Port Folio Management.Studying various aspect of accounting

terminology.

Limitation of finance department in an organizationion

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Problem of accuracy :Rigidity and inflexibility in administration:External constraints:Always base on assumption :High concentration of authorities:Could not take independent decisions:Not every time have an ability to tackle

emergency situations:More concentration requiresProblem in allocation of finance

COMPETENCIES

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AccuracyMonitors accuracy of own transactionsRecords transactions accuratelyMaintains accurate recordsRecognizes and corrects errors

Cash HandlingComplies with established proceduresMaintains accurate cash flow recordsResolves cash discrepanciesMonitors access to fundsAudits funds

SummarySummary

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As the speculation of industry professionals go, it’s definitely going to be an upswing for the finance sector. At present, the finance sector is getting transformed into a technology-intensive and customer-friendly model with a focus on convenience. The role of an integrated financial infrastructure is to stimulate and sustain economic growth. Finance will have a significant contribution in propelling India forward as a global economic power.