, FINANCIAL MANAGEMENT 2I4
AareER-XE
managementcreates wealth by effective utilisation of enterprise's resources to generate income... cash
to I wealth, business activities need to generate an acceptable return on capt. Investment
higher return: higher share price
·
all fin decisions should contribute to wealth maximisation:
investment in assets:Capital budgeting (LT) -Wht should be done we profit?
·
pay dividend
buy-back
·
shares
how to
manage working capital
·
reinvest back in the firm
assets:capital
financing structure
ROLE OFF INANCIAL MANAGER
more the
managing cash flow keeping eye on books
use financial tools + principles to solve business problems
assist mangment in making the
right decisions: · capital investmentdecision
·
financing decision
·mangmento f working capt.
·
dividend decision
not just to max. Profitbutmanage risk as well
FINANCIAL ECONOMICS
·
macro econ - its impact on the business
·
focus on working of fin. mrkts institutions
+
anticipate effecto fon company since it'll no significanteffecto n fin. Situation per formance
+
on the enterprise
Which enterprise finds itself
-
. econ. environ. the
FINANCIAL ACCOUNTING
·
reporting of fin. data according to guidelines
focus:d iff. frm fin.
·
Mangmnt
. focus:o n profit + historical data
3
primary objective compiling fin. Statements according to IFRS
FINANCIAL MANAGEMENT
·
micro econ. Ivl i.e. Win enterprise
·focus:
on decision making mangmut of
+
decisions
·
focus on cash flow creating value in future
INVESTINGING DECISION
to make t o determine which investments in assets required
-
ist decision fin.
tht manager needs
-
·
·
decision w/ regard to NC assets (vehicles, machinery, factories, buildings, etc) assets
cur rent
+
(cash, inventory, TR, etc) the enterprise requires: needs to be made
task of fin. Manager... identification,
eval. implementation of
I
profitable projects
investments:c onsidered
-
·
only profitable
FINANCING DECISIONS
finance investments
and importantdecision
how to
.
·
whn making w i tht fin.
decisions: manager attempts to implement optimal capital structure
DIVIDEND DECISION
be reinvested as reserves / ifthey're going to be distributed btwn SH
·
decision whether earnings:g oing to
·
decision-making continuous
process: [in enterprise's situation:constantly occur]
capital redemption:non-distri. reserve into which amts: transferred following redemption purch of company's own shares of
out distri profits or in certain circumstances from proceeds of a fresh issue of shares
, FINANCIAL MANAGEMENT 2I4
-MaR
FNO
I
FINANCIAL POSITION ON GIVEN DATE
.
economic resources avail. SFP
assets, liab. equity
· +
I
year(
FINANCIALPERFORMANCEFORSPECIF PER zinFinal SPI
·
Profit + LOSS
years)
CHANGES IN FINANCIALPOSITION FOR CERTAIN PERIOD (Financial
SCF
operating, investment financing activities
· +
REQUIREMENTS
understandable logical
-
relevant(enable to eval historic, current,
a
future changes)
significant (if exclusion leads to incorrect decision)
timely (during period in much it can no effect (
Reliable
accurate
objective
comparable
fin. Statements according to
accounting guidelines (IFRS)
diff. guidelines interpretations to report same item
standardised fin. Statements
statement
of financial
position
ASSET:NON-CURRENT
capt. Investment applied to
generate income
-
PPE @CV
·
cOSt
·
accum. dep.
intang, assets (non-physical u sed to
but gen. Turnover (
.
good will
·
patent rights
·
manufacturing licenses
·
trademarks
·
computer software
·
NB:difference amortization us impairment
financial assets
·
investments in associates
50%
·38!;
·other share investments
·
20%
cOSt
·
·
loans granted (interest bearing)
ASSETS:CURRENT
relatively shot period:1yr
converted into cash w/ relative ease
inventories (required for operations)
TR (CR SAICS)
other receivables
casht cash equivalents
DreDm+S
ST fin. assets ST loans investments
+
EQUITY +
LIABILITIES
forms c apt. used to
of finance assets
equity
NCL +CL
Ord. SH equity:
ord. Share capt.- issued shares x ave issue price
· SH position of ownership. When buy-bck
there:
non-distri, reserves
>future redemption of capt.
·
I be distri. As div. ·
reval reserve, capt redemption reserve
distri, reserves
in SPL
4 in GR=> transfer of gen. reserve
,
·
distri, to ord. SH via. div. RE, general reserve
AareER-XE
managementcreates wealth by effective utilisation of enterprise's resources to generate income... cash
to I wealth, business activities need to generate an acceptable return on capt. Investment
higher return: higher share price
·
all fin decisions should contribute to wealth maximisation:
investment in assets:Capital budgeting (LT) -Wht should be done we profit?
·
pay dividend
buy-back
·
shares
how to
manage working capital
·
reinvest back in the firm
assets:capital
financing structure
ROLE OFF INANCIAL MANAGER
more the
managing cash flow keeping eye on books
use financial tools + principles to solve business problems
assist mangment in making the
right decisions: · capital investmentdecision
·
financing decision
·mangmento f working capt.
·
dividend decision
not just to max. Profitbutmanage risk as well
FINANCIAL ECONOMICS
·
macro econ - its impact on the business
·
focus on working of fin. mrkts institutions
+
anticipate effecto fon company since it'll no significanteffecto n fin. Situation per formance
+
on the enterprise
Which enterprise finds itself
-
. econ. environ. the
FINANCIAL ACCOUNTING
·
reporting of fin. data according to guidelines
focus:d iff. frm fin.
·
Mangmnt
. focus:o n profit + historical data
3
primary objective compiling fin. Statements according to IFRS
FINANCIAL MANAGEMENT
·
micro econ. Ivl i.e. Win enterprise
·focus:
on decision making mangmut of
+
decisions
·
focus on cash flow creating value in future
INVESTINGING DECISION
to make t o determine which investments in assets required
-
ist decision fin.
tht manager needs
-
·
·
decision w/ regard to NC assets (vehicles, machinery, factories, buildings, etc) assets
cur rent
+
(cash, inventory, TR, etc) the enterprise requires: needs to be made
task of fin. Manager... identification,
eval. implementation of
I
profitable projects
investments:c onsidered
-
·
only profitable
FINANCING DECISIONS
finance investments
and importantdecision
how to
.
·
whn making w i tht fin.
decisions: manager attempts to implement optimal capital structure
DIVIDEND DECISION
be reinvested as reserves / ifthey're going to be distributed btwn SH
·
decision whether earnings:g oing to
·
decision-making continuous
process: [in enterprise's situation:constantly occur]
capital redemption:non-distri. reserve into which amts: transferred following redemption purch of company's own shares of
out distri profits or in certain circumstances from proceeds of a fresh issue of shares
, FINANCIAL MANAGEMENT 2I4
-MaR
FNO
I
FINANCIAL POSITION ON GIVEN DATE
.
economic resources avail. SFP
assets, liab. equity
· +
I
year(
FINANCIALPERFORMANCEFORSPECIF PER zinFinal SPI
·
Profit + LOSS
years)
CHANGES IN FINANCIALPOSITION FOR CERTAIN PERIOD (Financial
SCF
operating, investment financing activities
· +
REQUIREMENTS
understandable logical
-
relevant(enable to eval historic, current,
a
future changes)
significant (if exclusion leads to incorrect decision)
timely (during period in much it can no effect (
Reliable
accurate
objective
comparable
fin. Statements according to
accounting guidelines (IFRS)
diff. guidelines interpretations to report same item
standardised fin. Statements
statement
of financial
position
ASSET:NON-CURRENT
capt. Investment applied to
generate income
-
PPE @CV
·
cOSt
·
accum. dep.
intang, assets (non-physical u sed to
but gen. Turnover (
.
good will
·
patent rights
·
manufacturing licenses
·
trademarks
·
computer software
·
NB:difference amortization us impairment
financial assets
·
investments in associates
50%
·38!;
·other share investments
·
20%
cOSt
·
·
loans granted (interest bearing)
ASSETS:CURRENT
relatively shot period:1yr
converted into cash w/ relative ease
inventories (required for operations)
TR (CR SAICS)
other receivables
casht cash equivalents
DreDm+S
ST fin. assets ST loans investments
+
EQUITY +
LIABILITIES
forms c apt. used to
of finance assets
equity
NCL +CL
Ord. SH equity:
ord. Share capt.- issued shares x ave issue price
· SH position of ownership. When buy-bck
there:
non-distri, reserves
>future redemption of capt.
·
I be distri. As div. ·
reval reserve, capt redemption reserve
distri, reserves
in SPL
4 in GR=> transfer of gen. reserve
,
·
distri, to ord. SH via. div. RE, general reserve
