Financial Knowledge

  Financial Market   Financial market means where we can buy or sell the financial assets is financial market or financial market is where buyers and sellers participate in the trading of financial assets such as stocks, bond, debentures, commodities, currencies, and derivatives. Financial market is types of market which is the main basic resources of development of country. It collects the savings from savers and transfers them to where necessary. This market collects saving from individuals, Institutions, organizations and government and invest them to where necessary such as company, government, institutes etc. This market always maintains the liquidity in the financial system.

  Financial Assets Financial Assets is one types of paper assets which is received from investing in shares or debentures and fixed deposit. Financial assets earn profit and increase assets. We can convert financial assets in rupees easily. Financial Assets is invested as money and it earn profit and given to the investors return. Financial assets are resources that hold monetary value and traded in financial market and we can easily purchase and sell the assets in financial market. Company’s shares, debentures, bonds, fixed deposit, government securities, bonds; stocks are the example of financial assets.

  Main documents of company   There are main three documents of company. That is memorandum of association, Article of Association and prospectus.   1 Memorandum of Association   Memorandum of association is a main document of company. In this document name of the company, objective, office address, Capital and liabilities, Contract are written as main documents. In the document authorized capital, types of shares, Share money payment method, liabilities of share holders are written. 2. Article of Association   Article of Association is also an importance document of a company. To achieve the objective of memorandum of association the article of associate is important. Article of association means work plan of memorandum of association. We can say it is working plan or working strategy. In this articles the rules and regulations are make to operate the business activities. In the articles the rules are like time of annual meeting, working types of ...

  Meaning of company     Company is a large capital Business. The capital is divided into small units that are called shares. The company collects the capital from issue of shares. Therefore company means large types of business firm, which is collected the capital by issue of common stock and it is artificial person also. The company does the work itself. The Shareholders are the main owners of the company. The shareholders select a committee to operate the organization and share holders received dividend from the profit of the Company. The company is better than sole proprietorship and partnership-firm. Because it starts from huge capital and best management. The lifetime of the company is also more than sole proprietorship and Partnership firm. The shareholders select best management committee from share holders and they manage the business by better way. In the company the liabilities of the shareholders are limited and share are easily transferable from one t...

  Meaning of partnership firm   Partnership firm means it is one types of business which is done by two or more than two partners. For achieving same goals two or more than two partners are organized and done activities by division of right and responsibilities are Called partnership firm. In this firm all partner's right and responsibilities are written in partnership deed. In this firm the capital is higher than sole proprietorship management is also better and can expanse the market also.   Features a. More than one owner: In this business firm there are minimum two   or more than two owners. b Based on agreement - In this Business there is agreement between members and according to agreement they do the firm's activities. c. No separate existence: In this business there no separate existence between owner and firm. d. Unlimited liabilities: In this firm, the liabilities of owners are unlimited. If the firm cannot pay the liabilities then, li...

  Meaning of sole proprietorship   Sole proprietorship firm is a small capital business which is done by single person. In this Business only one owner is investing and manage whole the business activities. In this Business the owner manages the whole resources of Business and receive all income and profit and bear whole Liabilities of Business.     features of sole proprietorship   i single management: The owner manages whole the business activities.   ii. Single owner: In this Business one owner Invest whole capital.   iii .Unlimited liabilities: The owner liabilities are unlimited in the business that means if the owner cannot pay the Liabilities from business, then liabilities paid by owners domestic Assets.   iv . No separate existence: In this Business , the owners and Business is not separate.   v. Monopoly in profit: In this Business the owner receives whole the profit alone and bear whole the risk also.   Vi. B...

Forms of Business organization     Business means be Beasy in an activity for earning profit. Business means doing activities for money. We can say Business Is an economic activity which is done for earning.  Transactions of production, buying and selling for income is business. There are different types of business firm but there are three maj o r firms of business.   i . sole proprietorship    ii .  partnership firm   iii.  company    

  Organization of finance function     Organization of finance function means organizational structure of financial management or appointed different level of staffs in the organization. In the organization the financial function is top level of functions. Therefore, the company appoint different level of financial officer in the organization.   According to above chart on the top level, there are board of directors, which is selected from stock holders . After the BOD, there is chief executive officer (CEO) is appointed by BOD. Under CEO, there is chief finance officer, which is top finance department, under financial officer (CFO), there are controller, treasure and internal auditor. In this way the financial organizations are set up their organizational structure. All officers have their own right, duties and responsibilities in the organization to achieve financial goals.  

  Goals of the firm/corporation     Goals of the firm means what want to achieve the firm in the future that is goals of the firm. There are many types of goals of organization according to their types and working method. But the two main goals are common of whole profit organizations. The first is profit maximizing objective and second is wealth maximization objective . Both types of objectives are given below in details.     i . Profit maximizing objective    profit maximization objective is a one of most important objectives for all business firm. Without profit we cannot operate any business to long term. Because the company paid their whole expenses f rom profit. If the company e arn more profit , then the company paid their whole expenditure e asily , and can expanse the business. Shareholders and government also can receive more dividend and taxes. From the maximizing of profit the life of the company increases to long term and can p...

  Routine finance functions/ Daily financial functions     Routine finance function means that types of function which is done daily activities according to routine. These types of functions are necessary to managerial finance functions like decision making and planning. The main routine finance functions are given below:     I. Supervision of cashflow      In these functions, cash transactions activities are done to manage cash. Cash in flow, cash out flow, cash balance, receivables, payables are main functions of supervision of cashflow , which is necessary to protect Cash.     ii. Safeguarding Assets and documents     Protection of different financial assets and documents are the routine function of finance, like shares, Debenture, bonds, Insurance and other important documents.     iii.  Recording of financial activities    In the Business organization, there are many financial transactions ...