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

FM - Essay lawsuitPracticing managers are interested in this subject because among the most crucial decisions of the firm are those which relate to finance, and an understand of the theory of financial management provides them with conceptual and analytical insights to make those decisions skillfully1.Financial management, as an academic discipline, is implicated with decision-making in regard to the size and composition of assets and the level and structure of financing. To make wise decisions a short 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 canvas 2.Financial management is related to meshwork maximization as a decision criterion. According to profit maximization goal, actions that increase profits should be undertaken and those that decrease profits are to be avoided. In circumstantial opeproportionnal terms, as applicable financial management, the profit maximization criterion implies that the investment, financing and other decisions of the bother should be orientated 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 needed at all as the main objective of financial management is profit maximization.Workings for setting up financial goalFixed costRefurbishment cost 3 8000Building fixed overheads 2000 per calendar month 2000 6 months=12000 for 6 monthsSo total fixed cost= 8000+12000 =20000Fluct uation of Personnel Contingent 4100150200250300Cost of Goods sold 5108000162000216000270000324000Advanced stock Purchased for 2 weeks360054007200900010800Total variableCost 6111600167400223200279000334800Total revenueSpend of customers/Revenue of the store 7150000225000300000375000450000Total cash inflowConsidering Fluctuations3000 8153000228000303000378000453000Total cash inflowConsidering Fluctuations4000154000229000304000379000454000Net cash inflow (Considering starting Cash as 3000) 92140040600598007900098200Remark 10So to operate the store at not operating loss the minimum financial goal have to be 153000 for six months. unavoidableness 2Tools to analyze a projectRatios provide very useful tools for the manager to assess the shaping 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 there has been an improvement or