03-05-2014, 03:02 PM
Introduction Of Financial Management
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INTRODUCTION
The scope of financial management that is the views about finance functions have undergone remarkable changes over time. Till 1950, finance function was regretted as the function only of rising finance for business and consequently the discussion cantered round different source of finance, financial institutions, financial documents etc. since last 30-40 years, however an effective and efficient utilization of finance has also been considered as an important function of financial management as a result of it, the scope of financial management has widen now and this development has been given due place in the present day syllabi on subject. In the present chapter we shall first consider the meaning and the scope of financial management. Then we shall familiarize ourselves with the issues included in the financial function. Finally, we shall describe the role of financial manager, his functions.
Wealth maximization on next wealth maximization:
It means maximization of net worth of the shareholders. It is also known as maximization approach. When a financial decision is to be taken to invest money in some project, the project must be so selected that the present value of cash flow from it exceeds the present value of cash outflow to be invested.
MISSION OF THE COMPANY
In Manufacture :
To expand qualitative manufacture with proper marketing infrastructure, thereby meeting customer’s requirement of quality and timely delivery resulting in cost advantages to the customer.
In Service :
To identify and associate with quality oriented companies with similar or identical corporate goals and philosophy.
To expand area of operation in order to provide growth opportunities to employees and motivating the employees in providing quality service to customers with growth of business and customer satisfaction as key objectives.
SIGNIFICANT ACCOUNTING POLICIES
(I) Basis of preparation of financial statements:
The financial statements have been prepared and presented under the historical cost convention on accrual basis, following the Generally Accepted Accounting Principles in India (Indian GAAP) and comply with the Accounting Standards specified in Rule 3 of Companies (Accounting Standards) Rules, 2006 and the relevant provisions of the Companies Act, 1956.
(II) Use of Estimates:
The preparation of the financial statements in conformity with the accounting standards generally accepted in India requires, the management to make estimates that affect the reported amount of assets and liabilities, disclosure of contingent liabilities as at the date of the financial statement and reported amounts of revenues and expenses for the year. Actual results could differ from these estimates.