FM Essay Example | Topics and Well Written Essays - 4000 words

FM - Essay ExamplePracticing managers are interested in this subject because among the most crucial decisions of the firm are those which unite to finance, and an understanding of the theory of fiscal management provides them with conceptual and analytical insights to make those decisions skillfully1.Financial management, as an academic discipline, is concerned with decision-making in regard to the size and idea of assets and the level and structure of financing. To make wise decisions a clear understanding of the objectives, which are sought to be achieved, is necessary. The objective provides a framework for optimum financial, decision-making. In other words, they are concerned with designed a method of operating the internal investment and financing of a firm. These all are done in a systematic way if financial management is studied 2.Financial management is related to profit maximization as a decision criterion. jibe to profit maximization goal, actions that increase profits s hould be undertaken and those that decrease profits are to be avoided. In detail working(a) terms, as applicable financial management, the profit maximization criterion implies that the investment, financing and other decisions of the problem should be oriented to the maximization of profits.Though in our specific proble... In specific operational terms, as applicable financial management, the profit maximization criterion implies that the investment, financing and other decisions of the problem should be oriented to the maximization of profits.Though in our specific problem, financial goal is set up in such a way that of not operating at a loss, financial management is necessitate at all as the main objective of financial management is profit maximization.Workings for setting up financial goalFixed make upRefurbishment cost 3 8000Building fixed overheads 2000 per month 2000 6 months=12000 for 6 monthsSo total fixed cost= 8000+12000 =20000Fluctuation of Personnel possible 41001 50200250300Cost of Goods sold 5108000162000216000270000324000Advanced stock Purchased for 2 weeks360054007200900010800Total variableCost 6111600167400223200279000334800Total revenueSpend of customers/Revenue of the store 7150000225000300000375000450000Total exchange inflowConsidering Fluctuations3000 8153000228000303000378000453000Total cash inflowConsidering Fluctuations4000154000229000304000379000454000Net cash inflow (Considering starting Cash as 3000) 92140040600598007900098200Remark 10So to operate the store at not operating loss the negligible financial goal have to be 153000 for six months.Requirement 2Tools to analyze a projectRatios provide very useful tools for the manager to survey the organization by making two basic types of comparisons. First, the analyst can compare a present ratio with past (or expected) ratios for the organization to determine if in that respect has been an improvement or