Recent Development in Financial Management

If we study  and research the recent development in the financial management, we have to study and research in its all parts. Only after this, we can know whether the recent developments in financial management is progressive or not.

We know that financial management is to receive the cheap resources of fund and then effective use of this fund for increasing the return and wealth of organisation. For doing this, work, finance manager has to manage working capital. He also use the tools of financial analysis and capital budgeting. He has to search new sources of finance for reducing the cost of capital. So, we have to research the recent development in all these areas.

Recent development in financial management

1. Recent Development in Working Capital Management

Working capital management is the management of current assets and current liabilities. We know that there is deep relationship between proper use of working capital and our profitability. Today, company wants excess of return on working capital over cost of working capital. Working capital management is playing a good role in this. Recently, Financial experts are developing best EVA. EVA means economic value added. It is the estimated profit which will be excess from required profit for shareholders and creditors. EVA on the working capital based means net operating profit after tax minus working capital charges.

There is also recent development for providing solution of Economic lot scheduling problem. If we find the best solution of ELSP, we can manage our inventory which will be helpful for proper management of our working capital.

 Each approach imposes one or both of these simplifying constraints: the zero-switch constraint (production of a part is started only when its inventory is depleted) and the equal-lot constraint (the lot size of a given part is constant through time). We provide a formulation that clarifies the relationships between the general problem and the three constrained versions, and compare their performances in a computational
In India, for better debtor management, RBI has licensed to 4 credit Score institutes. All these institute records the credit history of each company. Name of these institutions are he Credit Information Bureau (India) Limited ,  Experian ,  Equifax and  Highmark. Getting information will be helpful for reducing the risk due to providing debt.

2. Recent Development in the Tools of Financial Analysis

Ratio analysis is the important part of tool of financial analysis. Recently many new ratios have been developed by experts. Some of them, we are discussing here. Link

a) Uncovered Capital Ratio (UCR) : 

Uncovered Capital Ratio is calculated by obtaining the Portfolio at Risk (PAR) greater than thirty days minus impairment loss allowance divided by total capital.

b) Foreign Currency Risk Ratio :

The Foreign Currency Risk Ratio measures the relationship between  net foreign currency assets and equity for each foreign currency on the balance sheet.

Net Foreign Currency Assets / Equity for Each foreign Currency

c) Yield on Liquidity and Investment Ratio :

Yield on Liquidity and Investment Ratio indicates the level of returns an institution is generating from its
cash holdings and investments averaged over a given period.

3. Recent Development in Capital Budgeting and Project Planning

There is not any area in which development is zero. Sometime developments are hidden. We have to find it. In capital budgeting, there are lots of new techniques have been developed for evaluation of any project before buying. We are only including which we still did not included in our capital budgeting list.

Real Option Valuation and Analysis

It means to choose best option regarding any asset. Suppose, sometime to sell the asset is best option than to expand it. So, we find the ROV through capital budgeting and other methods.

4. Recent Development in Capital Structure

Now, arbitrage is possible in any capital structure. Capital structure is the combination of equity and debt. For example, in any capital structure, equity capital may be 30% and debt may be 70%. Arbitrageur can take the price advantages if there is different prices of company's equity or debt. For example two companies has different shares of ABC company. If two company merge for getting the benefit of high boom after this, this will be  merger arbitrage.

5. New Sources of Finance

Today, where is to take loan is becoming more costly, company and big corporates are thinking to get finance from new sources. In new sources of finance, buying of new business has developed. Buying of new business means new sources of earning. Same earning can be used as the source of fund. One more benefit of merge is that it give more power due to increasing the expert team. Open this news, you find every day companies are finding  new sources through merge.

Important : {This written lecture is the part of CS Accounting Notes}


Comments on this Website
Share above Content to Your Friends


access account accountant Accounting accounting definitions accounting ebook Accounting education accounting procedure accounting process outsourcing Accounting Software advance advertising africa Amalgamation amendments announcements Annuity assets audit auditing Australia B.Com. balance sheet bank Bank reconciliation banking basic accounting BBA benefits best bill black money blog bloggers book keeping bookkeeping Branch Accounting - full tutorial budget Budget variance business businessman CA calculator canada capital capital budgeting career cash cash book cash flow statement Chiense children china class coaching coins college commerce commerce students company computer computer accounting conference Contact vinod kumar corporate accounting cost cost accounting cost center cost centre CPA credit credit card cs currency data Debit and credit debit cards debt debtor degree depletion depreciation documents dollar domain Downloads Dubai e-accounting earning education Education Loans email employee EPF ERP euromoney examination excel excise duty expenses facebook factor of loan fans feature fifo FII fiji finacle finance Financial financial accounting fire insurance flickr flow forensic forex formula france fraud free fun function fund GAAP GDP gdr germany gold goodwill goodwill accounting google google apps google apps google base google buzz google calendar Google docs google finance google fusion tables google talk govt. GST guide health Hindi Hindi Language history holding company How to treat FBT in Tally 9 HRA ICAI ICAWI ICICI Bank IFRS income income statement Income Tax India indian railway Indonesia inflation inflation accounting infographics information inspiration insurance insurance accounting interest international Internet Introduction of Tally 9 inventory investment invoice IT Japan Job costing journal entries Kalculate keyboard kindle kuwait laptop law LBT learning lease lecture ledger leducation Leverage Analysis liabilities lifo linkedin loan logical point loss loss of profit M.Com. m.phil malaysia management accounting manual accounting manufacturing account market marketing mastercard material MBA MCA media migration mobile money ms word ms. excel multi currency in tally 9 Multicurrency Accounting mutual fund national security new and sacrifice ratio new york times new zealand news NGO nonprofit-accounting North Georgia Mountains NPV NSE odbc office oman online application online accounting otcei pakistan parents pay pal pdf pie chart pie chart of income pnb podcast ppf presentation price privacy policy prize money prof. vinod kumar profit profit and loss account project management provision purchase puzzles quickbooks Quote quotes quotes of svtuition rating agency ratio analysis RBI readers real estate rectification of errors remote control reports reserves responsibility accounting retirement revenue Revenue reserves review risk rupees salary sale saudi arabia saving sbi scholarship school SEBI security service tax share share trading Shares shri lanka singapore sms social accounting society solution South Africa stock stock exchange structure student students study subsidiary company svtuition swiss bank tally tally 9 Tally 7.2 Tally 9 Tally.ERP 9 tanzania tax Tax Accounting TDS teacher teaching technology test testimonial testimonials thailand tips trading trading on equity transaction trend trial balance tuition twitter UAE UGC - NET Commerce UK United Arab Emirates university usa valuation VAT Video Voucher and vouching wikipedia working capital youtube
Accounting Education: Recent Development in Financial Management
Recent Development in Financial Management
Accounting Education
Not found any lecture VIEW ALL Readmore Reply Cancel reply Delete By Home PAGES Lectures View All RECOMMENDED FOR YOU Category ARCHIVE SEARCH ALL Lectures Not found any lecture match with your request, please help to write it and send it to our email at for making this website free accounting and finance encyclopedia. Back Home Sunday Monday Tuesday Wednesday Thursday Friday Saturday Sun Mon Tue Wed Thu Fri Sat January February March April May June July August September October November December Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec just now 1 minute ago $$1$$ minutes ago 1 hour ago $$1$$ hours ago Yesterday $$1$$ days ago $$1$$ weeks ago more than 5 weeks ago Followers Follow THIS CONTENT IS PREMIUM Please share to unlock