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  • Financial Management in The 21st Century

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    meenhazrager
    12 vues13 pages
    The document discusses changes in financial management between the 1980s and 2010s. In the 1980s, financial managers focused on raising finances, investments, and controlling brick and mortar assets, while accounting to management. By the 2010s, finances were raised globally, investments extended beyond national boundaries, and intangible assets and regulatory compliance became areas of greater focus. It also summarizes different forms of business organization - sole proprietorships, partnerships, and corporations. Sole proprietorships have one owner with unlimited liability, while partnerships have two or more owners that may have limited or unlimited liability. Corporations are legally separate from owners and have limited liability. Finally, it distinguishes between money markets, which involve

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    Financial Theory

    Titre original

    Financial Management in the 21st Century

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    The document discusses changes in financial management between the 1980s and 2010s. In the 1980s, financial managers focused on raising finances, investments, and controlling brick and mortar assets, while accounting to management. By the 2010s, finances were raised globally, investments extended beyond national boundaries, and intangible assets and regulatory compliance became areas of greater focus. It also summarizes different forms of business organization - sole proprietorships, partnerships, and corporations. Sole proprietorships have one owner with unlimited liability, while partnerships have two or more owners that may have limited or unlimited liability. Corporations are legally separate from owners and have limited liability. Finally, it distinguishes between money markets, which involve

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    © All Rights Reserved
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    12 vues13 pages

    Financial Management in The 21st Century

    Transféré par

    meenhazrager
    The document discusses changes in financial management between the 1980s and 2010s. In the 1980s, financial managers focused on raising finances, investments, and controlling brick and mortar assets, while accounting to management. By the 2010s, finances were raised globally, investments extended beyond national boundaries, and intangible assets and regulatory compliance became areas of greater focus. It also summarizes different forms of business organization - sole proprietorships, partnerships, and corporations. Sole proprietorships have one owner with unlimited liability, while partnerships have two or more owners that may have limited or unlimited liability. Corporations are legally separate from owners and have limited liability. Finally, it distinguishes between money markets, which involve

    Droits d'auteur :

    © All Rights Reserved
    Téléchargez comme PPTX, PDF, TXT ou lisez en ligne sur Scribd
    Signaler comme contenu inapproprié
    sur 13

    Financial Management in

    the 21st Century


    Prantik Ray

    1980s vs 2010s: Change is the


    order

    1980s

    Raising the Finances


    Investment Functions
    Financial Control
    Chasing the Regulator
    Managing Brick and Mortar
    Assets
    Accountable to the
    Management
    Dominated by CAs

    2010s
    Raising the Finances from a
    Global Landscape
    Investment beyond National
    Boundaries
    Regulatory Compliance
    Facing Shareholder Activism
    Managing Intangible Assets
    Risk Control
    Presence of MBAs, CFAs etc.

    The Business
    Environment
    All countries have three
    basic forms of business
    Sole Proprietorships
    organization:

    Partnerships (general and limited)


    Limited liability companies

    The Business
    Environment
    Sole Proprietorship -- A business
    form for which there is one owner.
    This single owner has unlimited
    liability for all debts of the firm.
    Oldest form of business organization.
    Business income is accounted for on
    the owners personal income tax form.

    Summary for Sole


    Proprietorship
    Advantages

    Simplicity
    Low setup cost
    Quick setup
    Single tax filing on
    individual form

    Disadvantages

    Unlimited liability
    Hard to raise
    additional capital
    Transfer of
    ownership
    difficulties

    The Business
    Environment
    Partnership -- A business
    form in which two or more
    individuals act as owners.
    Business income is accounted for on each
    partners personal income tax form.

    Types of
    Partnerships

    General Partnership

    --

    All partners
    have unlimited liability and are liable for all
    obligations of the partnership. Maximum
    Number of Partners can be 20 (India)
    Limited Partnership -- Limited partners
    have liability limited to their capital contribution
    (investors only). In some countries like USA, at
    least one general partner is required and all
    general partners have unlimited liability. In
    some other countries, like India, all partners can
    have limited liabilities.

    Summary for
    Partnership
    Advantages
    Disadvantages
    Can be simple
    Unlimited liability for the
    general partner
    Low setup cost, higher
    Difficult to raise
    than sole proprietorship
    additional capital, but
    Relatively quick setup
    Limited liability for limited easier than sole
    proprietorship
    partners
    Transfer of ownership
    difficulties

    The Business
    Environment
    Corporation -- A business
    form legally separate from
    its
    owners.
    An artificial entity that can own assets and incur
    liabilities.
    Business income is accounted for on the income
    tax form of the corporation.

    Summary for Corporation

    Advantages
    Disadvantages
    Limited liability
    Double taxation
    Easy transfer of ownership
    More difficult to
    Unlimited life
    establish
    Easier to raise large
    More expensive to
    quantities of capital
    set up and maintain

    Financial Market

    Capital Market
    Securities of more than one
    year maturity are traded.
    Examples are equity, long
    term bonds etc.
    Regulator is SEBI.
    Used for long-term
    financing/investing of the
    firms.
    Yields are higher.

    Money Market
    Securities of less than one year
    maturity are traded.
    Examples are Treasury Bills,
    Certificate of Deposits,
    Commercial Papers.
    Regulator is RBI.
    Used for short-term
    financing/investing of the firms.
    Yields are lower.

    Money Market Instruments

    Treasury Bills
    Commercial Papers
    Certificate of Deposits
    Repurchase Agreements
    Bankers Acceptance

    Capital Market Securities

    Equity Shares
    Bonds/Debentures
    Secured Premium Notes
    Preference Shares
    Equity Shares With Detachable Warrants
    Sweat Equity Shares
    ABS/MBS
    Equity Derivatives
    Participatory Notes
    ETFs- REITs and Gold ETFs

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