Profit Maximization Vs Shareholders Wealth Maximization

The two main Goals/Objectives of Financial Management are – Profit Maximization [Traditional] Shareholders wealth Maximization [Modern] Profit Maximization It is a traditional and narrow approach which aims at maximization of returns by the firm in terms of monetary resources and increasing the earning per share of the shareholders. Under such approach maximization of profit is the sole objective of a […]

Read more

Types of Cost / Classification of Costs

What is Cost? It refers to the monetary expenditure which a firm has to incur in order to purchase or hire the factors of production. It is the expense of purchasing or hiring factor services for production and other business activities. Classification of Cost / Types of Cost There are various types of cost: On the basis of Nature of […]

Read more

Dividend Decision – Introduction

  According to the Institute of Chartered Accountant of India, dividend is defined as “a distribution to shareholders out of profits or reserves available for this purpose”. Dividend refers to that portion of profits after tax which is distributed among the owners/shareholders of the firm. It is the return that shareholders get on their investment. It may be in form […]

Read more

Working Capital Requirement

The Working Capital Requirement of a business is the sum of current assets or the amount of funds necessary to cover the cost of operating expenses of the business. The two main components of working capital are current assets and current liabilities. The excess of current assets over current liabilities is known as working capital. Working Capital = Current Assets […]

Read more

Capital Budgeting & Various techniques of Capital Budgeting

According to G.C. Lyrich “Capital budgeting is concerned with the allocation of firm`s financial resources among the available opportunities.  The consideration of investment opportunities involves the comparison of the expected future streams of earnings from a project with the immediate and subsequent streams of earnings from a project, with the immediate and subsequent streams of expenditure.”  It is simply long […]

Read more

Financial Markets – Money Market & Capital Market

Marketplaces setup to carry out financial activities are known as Financial Markets. A Financial Market is any marketplace where buyers and sellers get together to participate in trading of financial assets such as shares, bonds, currencies and other financial instruments. Financial markets are characterized by transparent pricing, regulation on trading, Underwriting costs and fees, and operation of market forces which […]

Read more
1 2 3