Methods and Tools of Financial Management:
Methods and tools of financial management are required for financing, investment. Here we are given vital methods and tools of financial management:
1. Tools of Financial Management for Financing:
A) Financial Leverage:
In this tool, finance manager fixes his requirement of financing. Over and low financing estimation might be harmful for corporation. Optimum loan necessity is fixed with financial leverage tool.
B) Selecting best source of finance:
In this tool, finance manager examine various source of financing. He checks their rates, repayment terms and other situation and then selects best option.2. Tools of Financial Management for Investing Decision:
Such tools are employed to know which best option of investment is. Will this alternative provide us best return at minimum risk: internal rate of return, capital budgeting, net present value? In the region of investment in current assets, we utilize working capital management for knowing best investment in present assets.
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The cause that we are regarded as to whether one company is a subsidiary of another is, of course, that group financial statements must be ready in which there is a parent/subsidiary relationship, but not otherwise.
Seriously, nobody would claim that accounting information completely meets all of the requirements of each of the several user groups.
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Reserves are profits and gains that a company has made and that still form part of the equity of shareholders.
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There is also very considerable proof that businesses choose to generate accounting information which exceeds the minimum needs imposed through accounting regulations.
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