operational managment

1. Venkata Bora - Tuesday, August 6, 2019, 11:30 AM

 

I really enjoyed knowing much about managerial Finance throughout the course, I learned importance and need of Managerial Finance. Managerial finance is an integral part of business management and critical to all businesses. It contributes significantly to the decision-making process and the overall productivity of an organization. This has led to an increase in the number of opportunities available for managerial finance professionals. Managerial finance refers to the branch of finance concerned with the impact of financial techniques, such as trend analysis, income statements and comparative financial statements, on business management. The focus of financial management is on the assessment of financial techniques and maximizing profits, which subsequently influences the financial growth of stakeholders.

Managerial finance plays an important role in the functioning of a business. Four key concepts serve as the fundamentals of financial management.

·         Cash management: the cash management function aims at ensuring that an organization has enough resources to meet its financial obligations. Financial resources are essential for a business to run smoothly. A cash deficit could adversely affect the operations and image of an organization. Effective cash management contributes significantly to a firm’s growth. The financial obligations must be fulfilled on time and without any foul play.

·         Financial reporting: financial decision-making largely depends on the accurate and detailed reports that present key pieces of information. The information should be cited in a format that is useful to the management and easy to decipher in order to derive necessary data from the reports.

·         Planning and predicting critical component of managerial finance which requires professionals to implement planning strategies. These strategies are used to forecast the company’s budget, revenue to be generated, future expenses and profits. In case the parameters do not perform as per the predictions, it indicates that changes in strategies must be executed. This will help the company to perform in accordance with the financial predictions and planning.

·         Capital: managerial finance is responsible for determining the best type of capital to fund the venture debt, equity or both. It is also responsible for determining how much fund will be required and when. The capital structure is essential to a company’s growth and can be obtained through equity shares or other financial institutions.

Importance of managerial finance:

Managerial finance is responsible for taking decisions that directly affect the profits, cash flow and revenue generation. It plays a significant role in a company’s growth.

·         Business life cycle: It is essential that the business always has enough cash to fulfill financial commitments made to the employees and suppliers. This means, accurate predictions about possible negative cash flow should be made in order to be prepared for an unprecedented event. Managerial finance also contributes to the decision of fund expansion and finding the appropriate source of funding.

·         Taxation: the aspect of managerial finance in a company also ensures that taxes are paid on time. Not paying taxes timely can affect the growth of the business.

·         Operations: an organization has a series of financial operations to take care of. Managerial finance ensures that the revenue generated is used profitably. Financial management professionals need to ensure that the revenue generated flows through an organization’s operations efficiently and is readily available to buy raw materials, assist sales strategies and fulfill financial commitments.

·         Reporting: financial reporting is imperative in order to make managerial finance an effective section of the business. Financial reports are indicators of the performance of different sections in a business. These reports also assist in financial decision-making and predicting financial parameters that are critical to the business.

The scope of the course includes historical, theoretical, and procedural analysis of the firm’s finance function with specific emphasis on maximizing shareholder value. Focus areas include capital structure, dividend policy, working capital management, and valuation. Through analyzing cases, as well as completing assigned exercises and problems, I will further develop and strengthen my financial management skills required to meet the challenges facing today's complex organizations.

2.   Srinivas Gandla  - Tuesday, August 6, 2019, 1:14 PM

 

Consider the content of this class as they relate to financial acuity and managerial decision making.

It is important to understand the roles of financial measures and laws that are required for the successful running of any business venture or project. Financial acuity is having a clear idea of well-structured financial management and important pieces of financial information like financial statements, cash flows, and financial ratios. This course helped me in understanding the critical factors like financial planning and control, ability to solve the various problems related to various management dilemmas. In order for the organization to be successful, each employee should be aware of what all factors contribute to revenues and profits for the business (McGarvie, 2007). Financial analysis is helpful in arriving at a decision on any project undertaken by the organization and the scope of profitability of the venture can be analyzed with the available financial information. The key financial aspects that were outlined in the course and the group project helped me in gaining sufficient knowledge on the important factors that should be considered when taking important managerial decisions.

Base on the course content, discuss new skills you acquired from this class?

Concepts discussed in the course were helpful to me in understanding the financial status of an organization or a project. I am able to gain sufficient knowledge on the basic structural elements of financial analysis like financial statements, cash flows, time value of money and security valuation under the principles of managerial finance. Advanced topics that I am able to gain the skills include financial planning, forecasting, capital budgeting decisions, and working capital management which will be helpful for myself and my team while taking managerial decisions.

How would you apply your new knowledge your current and/or future profession?

I am currently working for a financial services organization and there are numerous financial services or products that will be catered to the customers on a daily basis. I will use the skillset gained from this class in suggesting the team the important financial elements to be considered before undertaking any new project or service launch. The useful information from the financial analysis models will be presented before the team regarding the continuation of future or existing projects with sustainable cash flows. This will be helpful for the manager and the team in making an accurate decision on the project.

3.   Aditya Sambaraju  - Wednesday, August 7, 2019, 11:06 AM

 

The study of managerial finance is concerned with the financial decisions of a firm(as distinct from the study of the structure of markets for obtaining capital). We break the firm’s decisions down into three basic types:

1. Investment decisions or, more generally, the allocation of funds among different types of assets or activities.

2. The obtaining of capital in the appropriate mixture of debt and common stock or other securities.

3. The dividend or distribution decision (giving of funds back to common stock investors in return for the use of the capital).

We shall find that there are analytical methods of analyzing all of these decisions. In some cases, we can reach fairly definite judgments as to correct and incorrect decisions; in others, we can only identify the relevant quantitative and qualitative considerations.

Business organizations are continually faced with the problem of deciding whether the commitments of resources — time or money — are worthwhile in terms of the expected benefits. If the benefits are likely to accrue reasonably soon after the expenditure is made, and if both the expenditure and the bene-fits can be measured in dollars, the solution to such a problem is relatively simple.

If the expected benefits are likely to accrue over several years, the solution is more complex. We shall use the term investment to refer to commitments of resources made in the hope of realizing benefits that are expected to occur over a reasonably long period of time in the future. Capital budgeting is a many-sided activity that includes searching for new and more profitable investment proposals, investigating engineering and marketing considerations to predict the consequences of accepting the investment, and making economic analyses to determine the profit potential of each investment proposal.

Finance managers (financial vice-presidents, controllers, treasurers, etc.) are responsible for a wide range of decisions made in a corporation. The accounts that appear on a balance sheet can be used to describe the tasks of a finance manager. On the asset side, there is the administration of current assets (managing cash, investing in short-term securities, and determining and administering a credit pol-icy) and long-term assets (i.e., making capital budgeting decisions that commit the company to investments in long-lived assets). Shifting to the equity (liabilities and stockholders’ equity) side of the balance sheet, the finance manager is responsible for offering advice as to the best financial structure (determining the relative use of debt, preferred stock, or common stock) and the characteristics of the firm’s securities and then implementing the decisions that are made.

Decisions described in this book can be related to decisions that involve one or more of the accounts on a balance sheet. This book will offer suggestions on how to improve the likelihood of making the correct decision, although frequently it will be seen that absolutely correct choices cannot be made.

To study problems of a manageable size, we shall generally assume that a specific decision does not affect other decisions. This naïve assumption may not be valid because of the interrelationships of decisions, but it does enable us to gain understanding. After this understanding is achieved, the complexities can be introduced. We shall learn to walk before we try to run.