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INTRODUCTION TO FINANCIAL
MANAGEMENT
SESSION-1 1
Content
Meaning and objective of financial
management
Functions of a finance manager
Correlation with other functional areas
Important forms of business organization
Regulatory framework affecting financial
decisions
SESSION-1 2
FINANCIAL MANAGEMENT
Objective :
To ensure that the various financial decisions are
taken in such a way that they result in the
maximization of shareholders’ wealth.
The three major financing decisions are:
SESSION-1 4
FUNCTIONS OF A FINANCE MANAGER
SESSION-1 5
CORRELATION OF FINANCE FUNCTION WITH
OTHER FUNCTIONAL AREAS
* Marketing-Finance Interface
* Production-Finance Interface
* HR-Finance Interface
* Linkage With The Functions Of The Top Management
SESSION-1 6
FORMS OF BUSINESS ORGANIZATIONS
SESSION-1 7
Sole Proprietorship
Disadvantages:
* The owner has unlimited personal liabilities.
* These firms cannot raise external capital which results in
lack of growth.
SESSION-1 8
Partnerships
SESSION-1 9
Partnerships
Disadvantages:
SESSION-1 10
Companies
SESSION-1 13
Feature Private Company Public Company
Appointment of Not Applicable Applicable if the Co.’s paid
Small Shareholder up capital is Rs. 5 crore or
Director more and having atleast
one thousand small
shareholder
Quorum for GM 2 personally 5 members personally
present present
Passing of Not applicable Applicable to only listed
resolutions by postal public company
ballot
Statutory Meeting Not Applicable Shall hold within a period of
one month nor more then 6
months from the date at
which the company is
entitled to commence
business
Audit Committee Not Applicable Applicable to every public
company whose paid up
capital is not less than five
REGULATORY FRAMEWORK
SESSION-1 15
Industrial Policy
Industrial Policy of a nation is the true determinant of foreign
investment as well as domestic investment.
Objectives of the Industrial Policy:
Maintaining a sustained growth in productivity;
Enhancing gainful employment;
Achieving optimal utilization of human resources;
Attaining international competitiveness and
Transforming the country into a major partner and player in
the global arena.
Policy Focus:
Deregulating Indian industry;
Allowing the industry freedom and flexibility in responding
to market forces and
Providing a policy regime that facilitates and fosters growth
of Indian industry.
Important Policy Measures announced by the Ministry
of Finance, Department of Industrial Policy to pursue
the objectives
SESSION-1 18