Course : B.COM

Financial management is concerned with management of fund whatever money is available whatever fund is available you will manage that that is called financial management what are the goals of financial management there are two one will be wealth maximization second one will be your profit maximization hello everyone i am your other lecturing videos from first

Grade college the temple of excellence so we are in the first session of your topic called financial management now so what do you mean by financial management managing the finance is nothing but your financial management so in the first session it is nothing but your day zero introduction section introduction session we did your syllabus in in detail we discussed

About your syllabus your marks allocation as well as your question paper pattern now in today’s session we will discuss about your chapter one that will be your introduction about financial management so agenda agenda for the day means it is nothing but what we are going to do for the day it is very simple the major topics we are going to cover first thing will

Be introduction and the second one understand the concept and the third one goals of financial management now before this we will understand what is financial management as i told you managing your finance we call it as financial management i can give you the best example is your mom like even if your that salary is ten thousand out of ten thousand six or seven

Thousand he will give to your mom out of six thousand your mom will take care of your family your mom will take care of your financial expenditure now she will allocate the whatever 6 000 she got out of 6 000 she will pay rent she will pay for provisions if you want to go outside she will give you some pocket money and if you want to go for some other places your

Fuel charges your food expenses everything she will manage in that limited amount this we call it as financial management with the limited resources maximum satisfaction now if anything is available if you go to any showroom they have mentioned that 50 off now will go for fast track watch it is available for 10 000. now due to the deep power or some offer they

Have given you 50 discount that 10 000 worth watch is available for what price it is available for 5 000 rupees now instead of spending 10 000 you can spend 5 000 and you can buy that watch so that you have saved five thousand that saving is nothing but financial management if you bought the same watch one month before you’re supposed to pay 10 000 you waited for

One month and you spent 5 000 and you bought that watch because you were waiting for that offer so this is all about we call it as financial management now the first part we will go that will be what your introduction part now so this will be your introduction part and we will understand this financial management is concerned with management of fund this will

Be your first point financial management is concerned with management of fund whatever money is available whatever fund is available you will manage that that is called financial management second one it may be defined as acquisition of fund at optimum cost financial management means not only spending while collecting money also you will plan and collect i’ll

Give you best example like you have one lakh rupees so out of one lakh rupees what you will do 40 000 you will keep it in bank 40 000 in the stock market another 20 000 you will give for outside for interest now out of one lakh 40k in bank 40k in some stock market and 20 000 in some hand loan you have given us hand loan now out of 40 000 you will get around

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400 per month out of 40 000 you will get around 4 000 per month out of 20 000 you may get around 2 500 2 500 per month so now out of one lakh so that person is ready to earn four thousand plus two thousand five hundred six thousand five hundred plus four hundred so six thousand nine hundred they’re earning from that one lakh now you may ask that so in the bank

40 000 he is getting only 400 but same 40 000 he is getting how much 4 000 half of that only 20 000 but they are getting two thousand five hundred now why he has not invested complete one lacking stock why he did not invest complete one lacking hand loan why because along with investment you have to see the risk factor also now in the stock market if stock

Gone means like your stock market down miss then what will happen you will lose completely of 40 000. if market is down means you will lose everything and you have given hand loan that person absconded that person is not traceable then what will happen you lost that 20 000 so in these two returns are high but your risk also high but in bank if you come after

10 years also whatever 400 into 10 years 4 000 you will get whatever 40 000 you have invested you will get that is called as your 40 000 without risk returns also less this is called management application and planning and control of finance function acquisition of fund at optimum cost these are the examples now next it aims at ensuring that adequate cash is

On hand to make the required now if your income is ten thousand will you spend a whole ten thousand in the first day of your salary answer is no out of ten thousand you will pay off all your views and balance 3000 you will keep it in your pocket or else you will keep it in bank why because in the emergency you can use this 3000 in the emergency you can use this

3000 that is called cash in hand to make the required current and capital expenditure clear next it facilitate ensuring that significant capital is procured at the minimum cost to maintain adequate cash on hand to meet any existences existence means emergency emergency that may arise in the course of business there may be chances of some emergency life you’re

Producing some goods raw materials it is normally it will cost you one lakh every month but this month due to kovid are some lockdown the same raw material is available for 40 000 usually it is available for one lakh per month now it is available for how much forty thousand what you will do you will buy three months together why because forty thousand plus forty

Thousand plus forty thousand if you pay one lakh twenty three months raw materials is stocked now if you miss this chance every month you have to go for one lakh one lakh one like three lakh you’re supposed to spend you have saved almost 1 lakh 80 000 means some time the raw materials are goods available at cheaper price if you have cash in hand you can go and

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Buy if it doesn’t have cash means you will miss that opportunity clear yes nice financial map management helps in ascertaining and managing not only current requirement but also future need also not only current requirement it will also fulfill your future need so whatever the financial management we prepare there is no not only for current year that is also

Useful for your future hope you understood with introduction part now if you understood that 10 percent also sufficient why because you will understand 90 percent in the next slide now so what is this in the slide you have pizza so just assume that that is a food don’t worry that is that is complete a vegetarian pizza like mushroom then there is a beggar and

There is a policeman there are three things are there now so as i told you 10 percent you have understood financial management 90 you will understand now concentrate next for next two to three minutes it is a small story to know about financial management now so there was a beggar he is around 70 years old aged person he was having 100 rupees in his pocket how

Much he was having he was having 100 rupees now he wanted to have food in five star hotel he wanted to have his meal in five star hotel it was his dream since almost 20 to 13 years now he had a dream to have food in five-star hotel with that hundred rupees he went to five-star hotel with hundred rupees he went to five-star hotel he ordered everything whatever

He needed so finally he done with his meal finally what will happen the waiter will come up with bill the bill is around 4 500. what is the amount of bill 4500 how much he is having he is having only 100 rupees can he pay this bill with 100 is it possible the answer is no now what he said simply he smiled and said i don’t have money what that beggar did simply he

Said with smile i don’t have money what normally the hotel people will do the managers suddenly they called policeman so they called policemen suddenly police came the police took this beggar to the police station the police took this beggar to the police station now in the police station what happened so they sent him to the jail now in the jail what he did he

Took that hundred rupees he gave to this police whatever handler he was having he gave to whom police so happily police what we did he said tata and he sent him outside now with 100 rupees he came out now what is the model of the story model of the story is very simple with 100 rupees the beggar had 4 hundred worth food how much he had hundred how much food he

Had four thousand five hundred this is called financial management with the less resources maximum utilization with hundred rupees getting 4500 worth of food is called financial money finance means money managing managing the finance we call it as financial management so so bego he taught me what is financial management clear yes this is all about your financial

Management will move for the next one so i don’t take much time on these cases why because you need not to remember everything goals of financial management only i have to remember two things one will be wealth maximization profit maximization what are the goals of financial management there are two one will be wealth maximization second one will be your profit

Maximization now now we are under profit maximization there is a main goal of financial management so to increase your profit is a major goal of your financial management now so it is a value it ignores timings it ignores qualitative aspects so to increase your fund to increase your profit value means it is nothing but confusion bias means to increase your profit

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The financial management will not clearly says that you should change in the rate of profit you should change in the amount you may change in the short run or long run it will not give you exactly but it is the motivation is what to increase the profit but it will not say that whether it is a long run or short term now it ignores timings so timings means the

Financial management will not concentrate on timings it may go one year also it may go one month also so timings is not concerned in financial management last one it ignores qualitative aspect to increase the profit you will go for low quality if you go for low quality you can increase your profit that is the reason it ignores qualitative aspects hope you are

Clear the second one will be wealth maximization don’t go with all these points very simple wealth maximization it is all about your shareholders so how to maximize your wealth how to maximize your fund for example your investment is 10 000 you want another 90 000 how can you collect this 90 000 from outsiders you can collect like maximizing with the help of

Shareholders like collecting money from outsiders like fifty thousand sixty thousand wherever the cost is less wherever the risk is less from them collecting money is called wealth maximization so no need to go for in-depth just remember the points and the last part again in this only whatever i make circle those things only you should remember now estimating

Capital requirements how much capital is required better mining the capital structure what will be your capital structure i’ll explain you about capital structure while doing that particular problem now finalizing that choice as the sources of finance it may be long run or it may be short term then deciding the pattern of investment what kind of will you go for

Long term as short term what pattern will go first equally up preference then distribution of surplus so whatever income you earn you have to distribute how do you distribute which are the important everything will be discussed and the last point is efficient management of cash so these are the points uh these are very important for five marks like key areas of

Financial management these are the points no need to remember whole sentence just whatever i have make box those things you have to remember i’ll go back to every slice if you want you can take screenshot this will be your agenda this is your first slide on introduction this will be your financial management and your goals of financial management part one goals

Of financial management part two and key areas of financial management so this is all about your today’s session in the next session we’ll come up with more and more concepts as i told you the first two or three session will be little boring why because it is theory once we done with theory we’ll go for complete problems in the problems it will be very interesting

Small small problem small small concept will go for that thank you

Transcribed from video
DAY 01 | FINANCIAL MANAGEMENT | V SEM | B.COM | INTRODUCTION ABOUT FINANCIAL MANAGEMENT | L1 By VidhyaashramliveBroadcastDetails{isLiveNowfalsestartTimestamp2020-11-25T053012+0000endTimestamp2020-11-25T055136+0000}