TYPE OF FINANCE

Finance Group

Short term Middle term long term

Four type of finance
• Self Financing:-Fund from private and family sources
• Debt Financing:- Borrowing money from others.
• Equity Financing:-By sale of an interest in the business.
• Other Financing:-Other sources such as Trusts and Grants.
PURPOSE OF FINANACE

• Start a new business.

• Buy a business.
• To buy asset such as plant and equipments.
• For working capital.
• To raise capital that can be return to share
holder or to the owner.
• To arrange fund to buy out a partner or a share
holder.
 HIERARCHY OF FINANCE
CEO
CFO
DIRECTOR OF FINANCE
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MANAGER MANAGER MANAGER MANAGER

ACCOUNT FINANCE PAYROLL
TAXATIO
A.MANANGER N
A.MANANGER A.MANANGER A.MANANGER

EXECUTIVE EXECUTIVE EXECUTIVE EXECUTIVE

ACCONTENT ACCONTENT ACCONTENT ACCONTENT

MANAGEMENT MANAGEMENT MANAGEMENT MANAGEMENT

4 TRAINEE TRAINEE TRAINEE TRAINEE
 Career Opportunities in Finance

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 Corporate Finance Functions

External Financing

Capital Budgeting

Corporate
Finance Financial Management

Functions
Corporate Governance

Risk Management
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 The Financial Management Function

• Managing firms’ internal cash flows,

• and its mix of debt and equity financing,
• to maximize the value of the debt and equity
claims on firms, and
• to ensure that companies can pay off their
obligations when they come due.
 Involves obtaining seasonal financing, managing
inventories, paying suppliers, collecting from customers,
and investing surplus cash

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 The Risk Management Function

• Managing firms’ exposures to all types of risk,

• both insurable (such as loss caused by fire or
flood) and uninsurable,
• in order to maintain optimum risk-return trade-
offs and thereby maximize shareholder value.
• Modern risk management focuses on adverse
interest rate movements, commodity price
changes, and currency value fluctuations.

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 The Capital Budgeting Function

Capital Budgeting – selecting the

best projects in which to invest
the resources of the firm, based
on each project’s perceived risk
and expected return.

Select investments for which the marginal benefits exceed

the marginal costs.
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 The Scope of Corporate Finance
• Financial managers should seek to maximize
shareholders’ wealth.
• How?
By performing the five basic duties of corporate
finance: External financing, capital budgeting,
financial management, risk management,
corporate governance.
• Select investments for which the marginal
benefits exceed the marginal costs.
• Port Folio Management.
• Studying various aspect of accounting
terminology.
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 Limitation of finance department in an
organizationion

• Problem of accuracy :
• Rigidity and inflexibility in administration:
• External constraints:
• Always base on assumption :
• High concentration of authorities:
• Could not take independent decisions:
• Not every time have an ability to tackle emergency
situations:
• More concentration requires
• Problem in allocation of finance
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 Is Accounting and Finance for you?

The following table provides information on skills & qualities

required for a successful career in Accounting and Finance
sector.

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 COMPETENCIES

• Accuracy
Monitors accuracy of own transactions
Records transactions accurately
Maintains accurate records
Recognizes and corrects errors
• Cash Handling
Complies with established procedures
Maintains accurate cash flow records
Resolves cash discrepancies
Monitors access to funds
Audits funds

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 COMPETENCIES

• Financial Analysis
Collects and researches data
Identifies data relationships and dependencies
Recognizes trends and patterns
Synthesizes financial data into meaningful terms

• Internal Auditing
Utilizes appropriate methods
Displays dedication to thoroughness
Provides independent and objective evaluations
Presents effective recommendations

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 Summary

As the speculation of industry professionals go,

it’s definitely going to be an upswing for the
finance sector. At present, the finance sector is
getting transformed into a technology-intensive
and customer-friendly model with a focus on
convenience. The role of an integrated financial
infrastructure is to stimulate and sustain
economic growth. Finance will have a significant
contribution in propelling India forward as a
global economic power.

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 20. question for mba finance in
interview.
• 1. What is Home Loan Modification? Mindteck
• 2. what is call option? Kotak
• 3.types of ratios? Capital-IQ
• 4. what is minority interest? Capital-IQ
• 5. Whats Dollex 30? Ernst-Young
• 6.what is working capital? Genpact
• 7. among fixed and floating exchange rates which is the best for
india? how? CSC
• 8. what is Derivative? eClerx
• 9. What is the functionality of Stock exchange Ing-Vysya-
Bank
• 10. what is capital adequate ratio Infosys
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 20. question for mba finance in
interview.
• 11. How to write an E-mail in IT Company to the Customer ?
JPMorgan
• 12. if u have done b.sc. bio than why did you opt FINANCE as your
specialization????? HDFC
• 13. full form of sensex? Infosys
• 14. what are the fundamental reasons behind the present worldwide
economic downturn? Deloitte
• 15. What is deffered revenue? Thomson
• 16. WHAT IS DIFFERENCE BETWEEN BANK RATE & REPO RATE
JPMorgan-Chase
• 17. WHAT IS THE DIFFERENCE BETWEEN ASSETS ALLOCATION AND
SECURITY SELECTION? Hero-Honda
• 18. What is the Risk of investment? HCL
• 19. what is the difference between interday trading and intraday trading?
Genpact
17 • 20 . How can you create a secret reserve? Wipro