The modern thinking in Financial Management today is that financial managers do not perform the role of goal keepers of financial data and information, and arranging funds, whenever directed to do so. Rather, financial managers occupy a key role in top management areas by solving complex management problems. Today, the financial managers are responsible for shaping the fortunes of the enterprise and are involved in the most vital management decision of allocation of capital. Finance managers are responsible for the procurement of funds and effective utilization of funds to achieve the business objectives.
Finance manager is required to make decision on investment, financing and dividend keeping in view the objectives of the company. While making investment, it is necessary to give stress for the time value of money. It means that the worth of money received today is different from that it should be received in future. There are number of reasons related with the time value of money, such as-
"Investment Analysis generates equivalent current year values allowing comparisons between different investments and identifies investment performance spikes or dips providing a tool to maximize overall return" (Investment Analysis Software. 2007).
In addition to this, time value of money is very important, because it helps in arriving the comparable value of the different amount arising at different points of time in to equivalent values of a particular point of time either in present or in future. The cash flows arising at different periods of time can be made comparable by using any of the two ways- i.e. by compounding the present money to a future date, (for finding out the value of the present money.); or by discounting the future money to present date, (for finding out the present value of future money.) Under techniques of compounding, future value of a single cash flow is-
FV= PV (1+r) ; Where,
FV= Future Value n years;
PV= Present value of cash flow today;
r = Rate of interest per year;
n = Number of years for which the compounding is done;
Similarly, under discounting techniques, the present value of a single cash flow is-
PV = FVn (1/1+r) ; Where,
FVn = Future value n years;
r = Rate of interest per year;
n = Number of years foe which the discounting is done;
Both investment and financing of funds are two crucial functions of finance manager. The investment of funds requires a number of decisions to be taken in a situation in which funds are invested and benefits are expected over a long period. Funds procured from different sources have to be invested in various kinds of assets. Long term funds are used in a project for various fixed assets and also for current assets. Investment of funds has to be made after careful assessment of the various projects through capital budgeting. Asset management policies are also laid down regarding various items of current assets. Investment in equity shares is a complex procedure; this is because unlike debt and preference shares
Finance is the life blood of any business, because for undertaking any kind of activities, even major or minor, source of funds is playing a massive role. The proper utilization and allocation of funds should be under the control of finance manager or his associates…
When one find that the risk and returns of a stock are understandable and can be estimated on the grounds of some broad parameter, the future behavior of these stocks can be predicted with moderate accuracy (Estrada, 2011). The companies chosen to be represented in a portfolio are as follows:ANZ, BHP, BOQ, HVN, TLS and WOW.
Companies can receive private equity from retailers and institutional investors and the funds serve a number of purposes such as acquiring new technologies, increasing working capital, strengthening the balance sheet and making acquisitions in terms of assets and other companies (Gilligan and Wright, 2008, p.
This study is focused on the role played by investment bankers in the IPO process of a company and how it functions during the issue of shares made by the companies to the public. Next, the various factors related to the selection of asset classes while constructing an investment portfolio has been discussed in this study.
Institutional investment is an investment related to organized institutions. Such institutions are caretakers of others’ equities and private holding investments. The role of institutions is deliberate as they set a system of organizing, developing and managing respective funds.
Foreign direct investments have been developed to avoid regulations on insurances and reserve that also prove to be beneficial for businesses. Facilities for production have also become flexible with FDIs, leading to the growth of MNCs (Levi, 2009). Some of the issues encountered by MNCs include juridical problems related with laws, and taxation; status problems; problems as a legal entity; problems with its characteristics, management and transfer pricing; problems with international economy and politics, these involving factors like risks with exchange rates; and differences in the historical backgrounds of different countries thus creating cultural and ethical differences and problems for
In line with choosing the best investment options, it is paramount to understand and consider all the investment styles, and the amount of risk that one is comfortable taking. There are three general investment
There may not be any nation in the world which has either directly or indirectly faced the threat of terrorism and its far-reaching reverberations. This causes for viewing terrorism as a formidable evil that should be wiped off from the world. The terrorist
The underlying rationale behind the choice of this company is the fact that the UK government places increasing political pressure on the players in this industry. For example, all bets placed online in UK need to pay 15pc “point of consumption tax” from last
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