FINANCIAL MANAGEMENT


FINANCIAL MANAGEMENT IMPORTANT KEY TERMS

•Common shareholder
•Preferred shareholder
•Bonds
•Debenture
•Financial market
•Cost of money
•Banking and non banking sector
•Stock market
•Capital
•Budgeting
•Dividend policy
•financial report
•Long and short term financing
•Inventory management


Common shareholders

-     Common shareholders are the owner of company and as such they have certain rights. They have the right to elect the director of the company.

-          In the small firm common shareholder hold the position of the company chairman and also hold the elections of directors periodically (once in a year).

-          Each share holder has one vote.

 Preferred Shareholder

-          It is similar with the bondholder in some respect.

-          It is equity according to accountant but its debt and equity

-          Dividend was set when the stock was issued

-          Dividends is indicated as % age of a” par value “

-          No voting rights

BONDS

       Long term contract

  Generally issued with maturities in the long term of 20 to 30 years and in short terms 7 to 10 years

 Agreement pay interest + principle amount on specific dates

It is advertised in the newspaper

Offered to general public and investors

DEBENTURES

   Unsecured bonds 

   No legal binding on specific property right 

  Debentures holder (DH) general creditors who claims are protected by property

Financial market 

It is that type of market where buyer and seller can buy and sell the securities, stock and bonds.

Cost of money

The value of the money will not be same in the future. If someone took money from you then he/she should repay according to the future value
.
STOCK MARKET 

It is a place where buyer and seller can meet

Capital

Capital is that is owned by the owner

Budgeting

future estimation or to predict the future

Dividend policy

 a set of the guidelines a company uses to decide how of its earning will pay out to shareholder

Financial report

it is that report which tell the company performance 


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