This document summaries the whole semesters work. It is a summary of both the chapter slides and the textbook notes including various formulas, calculations and ratios needed. The structure of the financial statements require for the module are included as well.
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
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
·
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
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