Welcome to the dynamic field of finance, where every decision carries the potential to shape the future of organisations and markets. This book serves as an essential guide to the principles of finance, designed for both newcomers eager to explore its foundations and seasoned professionals looking to deepen their expertise. Whether you’re a student laying the groundwork or a practitioner enhancing your strategic approach, this resource is crafted to help you master the critical concepts and applications of financial management.
In these pages, we explore the vital role of financial decision-making in today’s complex business environment. From understanding the time value of money to evaluating investment opportunities and managing corporate finances, we break down key topics in corporate finance, financial markets, and risk management. You will learn how to assess financial health, make informed investment decisions, and maximize value for stakeholders—vital skills in driving the long-term success of organisations.
Throughout the book, practical examples and real-world case studies will guide you through the process of translating theory into action. We emphasize the integration of financial tools with business strategy, ensuring you gain a comprehensive understanding of how financial decisions impact growth, profitability, and sustainability.
Ethical decision-making, regulatory frameworks, and emerging technologies in finance are also woven into our discussions, offering a complete view of the evolving landscape of financial management. Our goal is to empower you with the knowledge and skills to approach finance confidently, whether you’re analysing financial statements, managing corporate funds, or navigating global financial markets.
Contents –
1 Finance – An Introduction
1.1 Finance Definition
1.2 Meaning of Finance
1.3 Evolution of Finance as a Discipline: Traditional, Transitional and Modern Phase
1.4 Key Aspects of Finance
1.5 Key Finance Terms
1.6 Types of Finance
1.7 Meaning and Importance of Business Finances
1.8 Importance of Business Finances
1.9 Sources of Business Finance
1.10 Types of Business Finance
1.11 Why Business Needs Finance
1.12 Importance of Finance
1.13 Nature of Finance
1.14 Scope of Finance in Various Areas of an Organisation
1.15 Impact of Finance on Business Decisions
1.16 Financial Planning
2. Financial Management
2.1 Financial Management
2.2 Definitions
2.3 Objectives of Financial Management
2.4 Scope of Financial Management
2.5 Role of Financial Management
2.6 Functions of Financial Management
2.7 Organisational Structure of Finance Function
2.8 Relationship of Financial Management with other Departments
2.9 Finance Manager
3. Capital Structure
3.1 Meaning of Capital Structure
3.2 Importance of Capital Structure
3.3 Components of Capital Structure
3.4 Factors Influencing Capital Structure
3.5 Criteria for Determining Capital Structure
3.6 Theories Related to Capital Structure
4. External Sources of Finance
4.1 Shares – Meaning, Types
4.2 Equity – Characteristics, Advantages, Limitations
4.3 Preference – Characteristics, Advantages, Limitations
4.4 Debentures
4.5 Public Deposits
4.6 Borrowing from Banks
5. Internal Sources of Finance
5.1 Reserves and Surplus
5.2 Bonus Shares
5.3 Dividend Policy
5.4 Depreciation
