Time Value of Money

Many time we heard from our grand parent like, in their time they can purchased more things in 1 $ then today.
Money change with respect to the time. In finance view, how much money i'll get?
Means, If you deposit 100 bucks today at 10% interest rate, how much money will you get after 5 years.
If you want to buy a Mercedes Benz, then how much money you going to save then will you able to purchase a brand new Mercedes Benz.
if you deposit same amount every month/year is call ANNUITY.

Role of Financial Managers

Who is Financial manager?
Financial manager is a person who responsible for all Financial of firm/company/organization.
In old times, finance manager maintaining records, preparing reports and raising funds when needed.
now a days, finance manager also responsible for shaping the fortunes of the enterprise, and is involved in the most financial decision. he/she must be looking out, the funds of the enterprise are utilized in the most efficient manner.
He/She must be looking looking out for wealth maximization rather then only for profit maximization.

Main function of Finance Manager are:
1) Fund Rise: In traditional approach, financial manager has limited role, they simply looking for funds raising.
in her/his, day to day activities, FM's duty is to see that the firm have enough fund to meet it's obligations.
2) Fund allocation: FM is considered a vital and an integral part of overall management. FM must be allocation of efficient funds
3) profit Planning:
4)Understanding Capital Market: capital market tie the investors and firms together, that's why FM deal with capital market, FM measure the market risk.

Goal of FM
-Profit maximization as well as wealth maximization
Profit Maximization: Profit Maximization means, give maximum output at given input or use minimum input for  maximum output
In short, Profit Maximization is efficiency of firms.
-Wealth Maximization, means maximize Net Present Value, it's action to rising stakeholders value.
  

what is Finance Management ??? (in short way)

What is Finance management?
-Every Firm create manufacturing capacities for production of goods, (services)  to customer. After sell goods/service they earn profit. for maintain funds and proper use of finance.

Activity in Finance:
1) Economic: In which, whenever exchange information, get money (Value)
2) Non-Economic: In which, whenever exchange information, not get money (Value)

What are the financial Asset?
- Real Assets
Tangible Assets: Those Assets which can touchable, visible - Physical assets ex. building, machinery, office etc.
Intangible Assets: Those Assets which can't touchable, visible Ex. goodwill,  patents and copyright

-Financial Assets
Primary Market: basically new company enter
equity share
perferance share
bonds
long teams loan    
Secondary Market: basically for those company which already exist in market
obligation and borrowing from bank
financial institutions and other sources

Economic Order Quantity (EOQ)

EOQ is one of the very useful technique to maintain Inventory.
EOQ give the answer of 2 question :
1) what is order size?
2) At which level should be order?

First, understand what kind of cost are under inventory management. There are 3 kind of cost occur during maintain inventory, (1) Ordering cost (2) Carrying cost (3) Holding Cost.

The graphical representation.
 Formula of EOQ :
Annual Oder Cost = C x D/Q
Annual Carrying Cost = C" x Q/2

Total Cost = Annual Oder Cost + Annual Carrying
                     C x D/Q + C" x Q/2
(solve equation as take TC =0)
Q = (2DC/C")^(1/2)

In simple way, in graph we can see, the ordering cost is decreasing while we order large size of good but in other side when we order large size of good then carrying cost will be high. so here, EOQ help to finding out at which point, the lover ordering and carrying cost low.
EOQ also tell abut the Reorder Point:

as show in graph, red line show the order and reorder ling, when yr inventory comes in that like or we can say met the red line it's point call ordering point or reordering point. the time between order and receiving  is call lead time.
Formula :
Reordering Point = Lead time x Average usages

Learn to Say "NO"

"One cannot think well, love well, sleep well
          If one has not dined well"
                                   -Virginia Woolf

     some time people do the work which they do not like to do or they don't want to. then after they do the biggest question is "Why???" bez they r not able to say "NO" and may be 80% people are not say "NO" to close people. so, We waste our most important time to do those work which we don't like, and this lead to filer.
    So, it's batter to learn say  "NO" and utilize or important time to improve our self.

Best Teacher

Once a time BILL GATES in a restaurant.
After eating, he gave 5$ to the waiter as a tip. The waiter had a strange feeling on his face after the tip.
Gates realized & asked.What happened?
Waiter: I'm just amazed Bcoz on the same table ur son gave Tip Of... 500$...
& u his Father, richest man in the world Only Gave 5$...?
Gates Smiled & Replied With Meaningful words:
"He is Son of the world's richest man, but i am the son of a wood cutter..."


 Never Forget Your Past. It's Your Best Teacher. 

U must know...!

"Strength is life

  weakness is death"

                   - Swami Vivekananda

person must know what is the Strength and weakness to live effective life......!!!!!