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What is Finance? Finance, at its core, is the art and science of managing money. It encompasses a broad range of activities related to the acquisition, allocation, and utilization of funds. It is not merely about making money; it's about making strategic decis...

What is Ethics? Ethics is a set of moral principles that guide our behavior, helping us distinguish between right and wrong and make choices that are considered honest, fair, and responsible. It's about acting in accordance with what is good, not just what is...

Functions or Role of Financial Managers All decisions involving management of funds come under the purview of the finance manager; Fund requirement estimation The finance manager has to carefully estimate the requirement of funds. The purpose of funds and t...

Functions of a Financial Manager (Management) Imagine the financial manager as the money manager of a company. Their job is to ensure the company has enough money to operate, grow, and make a profit. They handle everything related to the company's finances. k...

Understanding Cost of Capital What is Cost of Capital? Imagine you need money to start or grow a business. You can get this money from various sources, like: Your own savings (Equity): Money you or your partners invest. Loans (Debt): Borrowing from a bank ...

CAPM, Leverage, and Risk: A Practical Guide Let's break down these financial concepts in a simple and clear way. 1. Capital Asset Pricing Model (CAPM) - Practical Problems As we discussed before, CAPM is a model used to calculate the expected return on an inve...

Dividend Policy Notes I. Dividend Policy Decisions: Meaning and Significance Definition: Decisions by a company's board on the amount, form, and timing of cash distributions to shareholders from profits. Determines how much of earnings is paid out versus retai...

V. Theories of Dividend Decisions A. Irrelevance Theory (Modigliani and Miller - MM): Core Idea: Dividend policy is irrelevant under perfect market conditions (no taxes, transaction costs, perfect information). Investors can create "homemade dividends." As...

I. Management of Working Capital: Meaning and Significance Definition: Planning and controlling current assets (cash, securities, receivables, inventory) and current liabilities (payables, short-term debt, accrued expenses) to ensure sufficient liquidity and ...

Working Capital Management Notes IV. Adequate Working Capital Definition: Optimal level of current assets to operate smoothly, meet obligations, and seize opportunities. Consequences of Inadequate Working Capital: Inability to pay bills (penalties, credit da...