Short Term Financial Budgets
A Budget is a detailed schedule of the
financial activity and it can be of the
following types as per the need and
requirement of the business:
How Do Corporations Issue Securities?
1. The Decision to Go Public
a. A general cash offer is a public issue of a security that is sold to all
interested investors. A general cash offer is not restricted to current
b. A rights off
Efficient Market Hypothesis
The Different Forms of Efficiency and the Evidence on Each Form
Depending on the kind of information reflected in stock prices, three different types of
market efficiency are commonly discussed.
I. Weak-form Efficien
Valuing Different Types of Debt (Bonds)
I. Financing with Bonds
A bond is a debt instrument issued by a corporation, which obligates that
corporation to make period interest payments to the holder of the bond as
well as to repay the principal a
The Cost of Capital
Cost of capital (hurdle rate): The average cost of the last dollars of financing obtained
by the corporation based on a desired or target capital structure. As such, it represents a
hurdle rate, which potential investment pr
Distributions to Shareholders: Dividends and
1. Mechanism of dividend payments: relationship between cash dividends
stock dividends stock splits share repurchase.
2. Impact that dividend policy has on the value of the firm.
Risk, Return and Capital Asset Pricing Model (CAPM)
Risk: An event of uncertain outcome.
I. Measuring Risk and Return for Individual Securities
Before investing, an investor should assess both the investments potential
(expected) return and the
CAPITAL STRUCTURE DECISIONS AND
1. Financial structure: long-term vs. short-term financing
2. Optimal capital structure: optimal mix of debt and equity
3. Target capital structure: structure that maximizes firms value
Current Assets Holding and Financing Policies
Idle cash balances do not earn a return and hence impose a drag on the
overall profitability of the firms assets.
I. Cash Forecasting (see Table 1 and 2)
Target balance the cash balance needed a
Managing Inventory and Receivables
I. Inventory Management
1. Participants in inventory management:
Purchasing manager is responsible for raw material shortages.
Production manager is responsible for a smooth production process.
Cash Management and the Target Cash Balance
Cash receipts are not perfectly synchronized with cash disbursements so
financial managers must have some cash on hand to pay off due accounts.
Methods for speeding up cash receipts and better man
Time Value of Money
What Is The Time Value Of Money?
The principle of time value of money the notion that a given sum of money is more
valuable the sooner it is received, due to its capacity to earn interest is the
Working Capital Management
Definition of Working Capital
Current assets such as cash, marketable securities, accounts
receivable and inventory which have a life of less than one
year along with the adjustment of less than one year
Using Financial ratios
Measuring Company Performance
The Role of Financial Ratios
ANALYZING FINANCIAL STATEMENTS
INTERNSHIP REPORT ON
HABIB BANK LIMITED PAKISTAN
MUHAMMAD IRFAN ALI
Mail address: [email protected]
& [email protected]
Address: Ward # 2 Mohala Chah Kurai