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Archive | Financial Management

Over-Capitalisation and Under-Capitalisation: Comparison

This article will help you to make comparison between over-capitalisation and under-capitalisation. Comparison # Over-Capitalisation: This state of affairs for a concern occurs where the amount of the shares issued is much in excess of actual requirement, and thus the rate of profit, i.e., the dividend rate will be too low to allow the shares […]

Raising of Finance for a Company: 12 Methods

This article throws light upon the top twelve methods used for raising finance for a company. The methods are: 1. Shares 2. Debentures 3. Public Deposits 4. Managing Agents 5. Loans from Banks 6. Ploughing Back of Earnings 7. Hire Purchase 8. Leasing 9. Profit Flowback 10. Credit Facilities 11. Trade Credit 12. Short Term […]

Capital Investment Decisions: Meaning, Significance and Techniques

After reading this article you will learn about:- 1. Meaning of Capital Investment Decisions 2. Significance of Capital Investment Decisions 3. Techniques used. Meaning of Capital Investment Decisions: Investment means laying out the money (also known as outlay) on an activity or a project with the expectation of some benefit. In an enterprise, expenditure may […]

Requisites of a Sound Capital Plan

This article throws light upon the eight important requisites of a sound capital plan. The requisites are: 1. Estimates of Financial Needs 2. Flexibility 3. Optimum Use of Funds 4. Liquidity 5. Mode of Finance 6. Simplicity 7. Planning Foresight 8. External Influences. Sound Capital Plan: Requisite # 1. Estimates of Financial Needs: Promoters must […]

Capital Structure of a Company: Meaning and Determinants

After reading this article you will learn about Capital Structure of a Company:- 1. Meaning of Capital Structure 2. Determinants of Capital Structure.  Meaning of Capital Structure: According to Gerstenberg capital structure or financial structure of a company is the make-up or form or composition of capitalisation, i.e., the type of securities to be issued […]

Finance Functions of Business: Meaning and Objectives

After reading this article you will learn about Finance Functions of Business:- 1. Meaning of Finance Function 2. Objectives of Finance Function. Meaning of Finance Function: “Finance is that administrative area or set of administrative functions in an organisation which relate with the arrangement of cash and credit, so that the organisation may have the […]

Financial Management: Meaning, Importance and Role

After reading this article you will learn about Financial Management:- 1. Meaning of Financial Management 2. Importance of Financial Management 3. Role. Meaning of Financial Management: It is an applied branch of general management. It looks after the finance function of the business. In itself it constitutes a sub-system of the business enterprises, inter-related very […]

Surplus Sources: Top 8 Sources of Surplus | Financial Management

This article throws light upon the top eight sources of surplus. The sources are: 1. Earned Surplus 2. Capital Surplus 3. Surplus from Unrealised Appreciation of Assets 4. Surplus from Realised Appreciation of Assets 5. Surplus from Mergers, Consolidations and Reorganisations 6. Surplus from Reduction of Share Capital 7. Surplus from Secret Reserves 8. Paid-in-surplus. […]

Top 13 Determinants of Dividend Policy | Financial Management

This article throws light upon the top thirteen determinants of dividend policy. The determinants are: 1. Legal Restrictions 2. Magnitude and Trend of Earnings 3. Desire and Type of Shareholders 4. Nature of Industry 5. Age of the Company 6. Future Financial Requirements 7. Government’s Economic Policy 8. Taxation Policy 9. Inflation 10. Control Objectives […]

Meaning and Types of Dividend Policy | Financial Management

After reading this article you will learn about the Meaning and Types of Dividend Policy. Meaning of Dividend Policy: The term dividend refers to that part of profits of a company which is distributed by the company among its shareholders. It is the reward of the shareholders for investments made by them in the shares […]

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