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What is Financial Management ? Explain Briefly with Examples

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What is Financial Management ? Explain Briefly with Examples. 

Financial management is concerned with the acquiring ,managing and financing assets with some goal in minds . this is basic them of Financial management . Liabilities and owner equity are at right side of balance sheet and Assets are at left side of balance Sheet.


Dividend Pay Out Ratio : 

Annual Cash Dividend divided by annual earning

Annual Cash Dividend / Annual Earning


DPS/EPS   : This ratio indicates the percentage of company earning that is paid out to share holders in cash .


What is Earning Per Share ? 

Earning after taxes divided by Common shares is called Earning per share

What is Agent ? 

Individual authorized by other person to act on his behalf is called agent and person is called principal

Agency Theory ? 

A branch of economic that deals with behavior of agent and principal is called agency theory .

What is Corporate Social Responsibility ? 

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Business Outlook that acknowledge the firm responsibility to his Stack holders with natural environments .

What are Stack Holders ?

All components of firm like creditors, investors, employees,suppliers, etc

Sustainability ?

Meeting the needs of present with out the compromising the ability of future generation to meet their own needs

Corporate Governance ?

The system by which the corporation are managed and controlled .

Limited Partners

he is not personally liable for debts of partnership

Corporation ?

A business form separates from its owners ,limited liability ,unlimited life,ability to raise the funds and easy transfer owner ship .

Durable Taxation : 

When same income is taxed at towice it is called Durable taxation.

Straight Line Depreciation ? 

A method of depreciation that allocates the expense during  depreciate life of assets .

These are some important terminology for finance and these are for chapter 1 that are very important to understand the main terminology of finance which are basic them of finance and financial institutes.

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