What is Managerial finance and why Managerial finance assessments at university are important? According to the definition given on wikipedia Managerial finance can be defined as ” The branch of finance that concerns itself with the managerial significance of finance techniques.” We can conclude that Managerial Finance is focused on assessment rather than technique itself
There is a significant difference between a managerial and a technical approach. This difference between the two can be seen in the questions one can ask of annual reports. As we know that a technical approach is primarily concerned with the measurement and it needs answer to the few questions , such as, Is money being assigned to the right categories? Are generally accepted accounting principles (GAAP) followed? So all these questions are very objective and can be answered.
Managerial Finance on the other hand try to answer the meaning of the figures involved. If one wants to solve the Managerial finance homework one should be well informed about both managerial accounting and corporate finance concepts and principles. So what is the role of the person who is looking after the Managerial Finance ?
- Person handling this area of Finance compare the returns to other businesses in their industry and try to answer few questions. He might ask , are we performing at par with out peers in the market? If the performance is worse compared to them, what is the reason of the problem? Are profit margins same ? If not, why? Are the expenses same or we are paying more for something than our peers?
- They keep the track of the changes in the asset balances or red flags that shows the problems with bill collection or bad debt.
- They also analyze and evaluate the working capital to gauge future cash flow problems.
Sound financial management creates value and organizational agility through the allocation of scarce resources amongst competing business opportunities. It is an aid to the implementation and monitoring of business strategies and helps achieve business objectives.
Managerial finance is a broader field and also captures the best way to use money in order to improve the future opportunities for money making and minimize the impact of financial shocks. As we pointed earlier Managerial Finance students should have a sound understanding of the Corporate finance principles as well. This is where corporate finance comes into picture and it helps to accomplish the set goals.
Valuation in Corporate finance : As name suggests it is used to estimate the worth of anything. In short a process of estimating the worth of a tangible or intangible item. These valued items are termed as financial asset or liability. So what are the items that can be estimated? Valuations can be done on assets , such as, investments in marketable securities like stocks, options, business enterprises, or intangible assets such as patents and trademarks or on liabilities. Valuations is an important aspect of corporate finance and students should pay special attention to the valuation techniques and its application in the area of investment analysis,capital budgeting, merger and acquisition transactions etc.
Dividend Policy : Most of the students studying corporate finance and managerial finance are well informed about the concept of dividend. According to the definition given on Investopedia Dividend policy can be defined as ” financial policies regarding paying cash dividend in the present or paying an increased dividend at a later stage.” There are various questions that needs to be answered before devising a dividend policy. Few of the questions are : Whether to issue dividends, and what amount? Answer to this question is simple and can be seen as a basic profit and loss concept. If the firm is making money then the shareholders are liable to get dividend otherwise not.
Working Capital Management: Without working capital a business cannot survive, so it is vital for a business to manage the corporation’s working capital position in order to sustain business operations. A firm has both assets and liabilities on their balance sheet and working capital management manages the relationship between a firm’s short-term assets and its short-term liabilities. The goal of Corporate Finance homework help is to make student understand about the the maximization of firm value. In the context of long term, capital budgeting, firm value is enhanced through appropriately selecting and funding NPV positive investments.
This article is written by one of our Finance professional who is associated with the Financial industry for the long time. He has also been helping students with their Managerial finance homework and Corporate finance homework. These concepts looks easy on paper, however the real implementation to the financial world requires a strong understanding and a firm grasp on the practical aspects of managerial finance. For more on the Managerial finance and corporate finance assignment help you can visit allassignmenthelp and submit your
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