Coordinator Kate Pankova: I take it reasonable to define the essence of Finance first. Let`s address our experts

Finance Department

Ed years studies

Orenburg 2011

Coordinator Kate Pankova: Welcome everybody

Coordinator Yulia Konstantinova:I’m glad to see you got here all right

Coordinator Kate Pankova :The weather is good today

Coordinator Yulia Konstantinova :Good weather good business

Coordinator Yulia Konstantinova:So, let’s move to our business.

Coordinator Kate Pankova: Our business for today is Financial Management Instrumentals

Coordinator Yulia Konstantinova: The isseus we need to settle will be :

Agenda:

Ø Finance:

· Personal Finance

· Public Finance

· Corporate Finance

Ø Functions of finance:

· Investment decisions

· Liquidity decision

· Dividend decision

· Profit allocation decision

Ø Financial institution:

· Banks

· Credit unions

· Stock brokerage firms

· Asset management firms

· Insurance companies

Ø Objectives of Financial Management:

· A sound capital structure

· A safety on investment

Ø Key elements of financial management

· Financial Planning;

· Financial Control;

· Financial Decision-making.

Ø Financial decision-making

· Create a constructive environment.

· Generate good alternatives.

· Explore these alternatives.

· Choose the best alternative.

· Check your decision.

Ø Financial audit

· Obligatory audit;

· Voluntary audit;

· Special purpose;

· Tax audit;

Coordinator Yulia Konstantinova: I think is better to begin with definition of financial management

Coordinator Kate Pankova: Ok! Financial Management means

Ø planning,

Ø organizing

Ø directing

Ø controlling

The financial activities such as procurement and utilization of funds of the enterprises of funds. It means applying general management principles to financial resources of the organization.

Coordinator Yulia Konstantinova: Speaking about Financial Management. It can be referred to as a branch of finance dealing with the managerial significance of the finance techniques.

Coordinator Kate Pankova: I take it reasonable to define the essence of Finance first. Let`s address our experts.

Yuilia Mojaeva : Good morning everybodes! Let me give you general idea of Finance.

First comes «Finance» is often defined simply as the management of money or “funds” management. Modern finance, however, is a family of business activity that includes the origination, marketing, and management of and money surrogates through a variety of capital accounts, instruments, and markets created for transacting and trading assets, liabilities, and risks. Finance is conceptualized, structured, and regulated by a complex system of power relations within political economies across state and global markets.

Now some words about the Personal finance.

Questions in personal finance revolve around:

§ How much money will be needed by an individual (or by a family), and when?

§ How can people protect themselves against unforeseen personal events, as well as those in the external economy?

§ How can family assets best be transferred across generations (bequests and inheritance)?

§ How does tax policy (tax subsidies or penalties) affect personal financial decisions?

§ How does credit affect an individual's financial standing?

§ How can one plan for a secure financial future in an environment of economic instability?

Personal financial decisions may involve paying for education, financing durable goods such as real estate and cars, buying insurance, e.g. health and property insurance, investing and saving for retirement.

Personal financial decisions may also involve paying for a loan, or debt obligations.

Public finance

Public finance describes finance as related to sovereign states and sub-national entities (states/provinces, counties, municipalities, etc.) and related public entities (e.g. school districts) or agencies. It is concerned with:

§ Identification of required expenditure of a public sector entity

§ Source(s) of that entity's revenue

§ The budgeting process

§ Debt issuance (municipal bonds) for public works projects.

Now some words about the Corporate Finance.

Let's consider the Corporate Finance. Managerial or corporate finance is the task of providing the funds for a corporation's activities (for small business, this is referred to as SME finance). Let me explain it , corporate finance generally involves balancing risk and profitability, while attempting to maximize an entity's wealth and the value of its stock, and generically entails three interrelated decisions. In the first, "the investment decision", management must decide which "projects" (if any) to undertake.

Secondly, "the financing decision" relates to how these investments are to be funded: capital here is provided by shareholders, in the form of equity (privately or via an initial public offering), creditors, often in the form of bonds, and the firm's operations (cash flow).In other words the balance between these elements forms the company's capital structure. As to, "the dividend decision", it requires management to determine whether any unappropriated profit is to be retained for future investment / operational requirements, or instead to be distributed to shareholders, and if so in what form.

Maria Vorokosova: How the corporate finance is connected with monetary decisions?

Yuilia Mojaeva: There is something else corporate finance is the area of finance dealing with monetary decisions that business enterprises make and the tools and analysis used to make these decisions. The primary goal of corporate finance is to maximize shareholder value while managing the firm's financial risks.