Finance 1 PDF

Finance  Nature and Aims of PART 01 Business Roles of Business Business are largely responsible for bringing into market a wide array of products and services which were not previously available. Business continue to provide mankind with the basic necessities like food and shelter...

Finance  Nature and Aims of PART 01 Business Roles of Business Business are largely responsible for bringing into market a wide array of products and services which were not previously available. Business continue to provide mankind with the basic necessities like food and shelter Business entities are means to develop a countries economies. Business Business is any lawful economic activity concerned with the production and/or distribution of goods and services for profit. Kinds of Business Commerce (e.g Trading, Merchanding, Marketing, etc.) Industry (e.g Genetic, Extractive, Manufacturing, etc) Services (e.g Recreation, Personal, Finance etc.) Objectives of Business Primary objective is for profit Other goals could be: Political influence Family Control of Business Community Involvement  Objectives of Business Provisions of product and services to the community; The satisfaction of personal of personal objectives like: Profits for owners Adequate salaries and compensation for executives and employe Psychic Income for all Protection and enhancement of the human and physical resources o society. Economy and Effectiveness of operation  Fundamentals of Part 2 Finance and Financial Management Finance is defined as Financial Management the management of means planning, money and includes organizing, directing, activities such as and controlling the investing, lending, financial activities such borrowing, as procurement and budgeting,saving, and utilization of funds of forecasting. the enterprise. Role of a Financial Manager Raising of Funds Allocation of Funds a firm can raise funds by allocates funds that are optimally the way of equity and debt. used. The following must be It is the responsibility of considered: financial manager to The size of the firms and its decide the ratio between growth capability. debt and equity Status of Assets Modes by which the funds are raised Financial Institutions companies in the financial sector that provides a broad range of business and services including banking, insurance, and investment management. Types of Financial Institutions Depository Institutions Non-depository Institutions Financial Instrument is a real or virtual document representing a legal agreement invlong some sort of monetary value. When a financial instrument is issued, it gives rise to a financial asset on one hand and a fianancial liability or equity on the other. Financial Assets Cash and Cash equivalent Accounts Receivable Notes Receivable Investments in equity/Debt instrument Sinking funds Financial Liabilities Payables Lease Liabilities Held for trading Liabilities Redeemable preference shares issued Security Deposits and other returnable deposits Equity Instrument Ordinary Share Capital Preference Share Capital Types of Equity Instruments Preferred Share Ordinary Share Financial Markets Refers to a marketplace, where creation and trading of financial assets such as shares, debentures, bonds, derivatives, currencies, etc. takes place Types of Financial Stock Market Markets Bond Market Commodities Market Derivatives Market  THANKS Click here to add to the title