Fm & wc analysis

Discussion on The Scope of Financial Management and Working Capital

Management

(Meeting With CRA Representatives)

Presented by:

Md. Afzalur Rahman

Date of presentation: 26-01-2010

Analysis of the nature and purpose of financial management within our organization.

Investment Decision

• Capital Assets• Working Capital• Financial Assets

Financial Decision

• Total Funding• Internal vs. External• Debt or Equity• Long Term or Short Term

Dividend Decision

• Profitability• Cash Flow• Growth• Legal Restriction• Shareholders Expectation

Primary aim: Maximize

shareholder's wealth

Maximize profit

Maximize sales to get market

share

Satisfice

Minimize cost

Economy•Quality•Cheap

Effectiveness•Purpose

Efficiency•Proper strategy

Value for money

Shareholders

Dividend

Capital gain

Employees

Salary

Security

Promotion

Customers

Value

Quality

Service

Suppliers

Price

Payment

Debt holders

Security

Liquidity

Government

Taxable profit

Inflation from price

hike

Employment

Employee•More salary•Less dividend

Shareholders•More wealth & dividend•Less salary

Customers•Better and longer service

Employees•Not happy to offer extra service

Management• More remuneration• Short termism• Risk seeker• Reckless status investment• Risky expansion by acquisition

Sharehoders• Less remuneration and more dividend• Long term benefit• Risk adverse

Discussion on the nature of working capital and its elements of our organization.

Application of the working capital ratios in the context of our organization.

Raw material

Order placed

Stock arrives

Inventory period Acc. peceivable

Acc. Payable

Firm receives invoice Cash paid for materials

Sales

Operating c.

COC

Cash received

Analysis of the factors of determining working capital requirement in our organization.

Receivables

Payables

Inventory

Cash

Key factors of working capital funding strategies of the organization.

As

se

tsFluctu

atingCurre

nt assetShort

term funds

Short term funds or

Long term funds

Permanent current assets

Non current assets Long term funds

Time

Thank You