SLM STRATEGIC FINANCIAL MANGEMENT

STRATEGIC FINANCIAL MANAGEMENT M com IV SEMESTER 2015 Admn CALICUT UNIVERSITY SCHOOL OF DISTANCE EDUCATION CALICUT UNIVERSITY 2038 SCHOOL OF DISTANCE EDUCATION Study Material School of distance education CALICUT UNIVERSITY SCHOOL OF DISTANCE EDUCATION Study Material MCom IV Semester STRATEGIC FINANCIAL MANAGEMENT Prepared by: Sri BAIJUMON.P ASSISTANT PROFESSOR DEPT OF COMMERCE AND MANAGEMENT STUDIES Scrutinised by: DR YAKOOB C RESEARCH GUIDE SULLAMUSSALAM COLLEGE, AREACODE Settings & Lay Out By: SDE,Computer Cell Strategic Financial Management Page School of distance education CONTENTS MODULE MODULE II UNIT Financial Goals & strategy UNIT Managerial Implications Of Share holder Value creation UNIT Financial Strategy For Capital Structure UNIT Capital Structure Planning & Decision Making UNIT Dividend Policy & Value Of The Firm UNIT Dividend Policy &Valuation of Firms UNIT Lease financing & Hire Purchase UNIT Financial evaluation of leasing UNIT Economics/pros and cons of leasing UNIT 10 Merger strategy UNIT 11 Valuation under mergers and acquisition UNIT 12 Take over strategy UNIT 13 Takeover code- procedure for takeover UNIT 14 Takeover defences UNIT 15 'Management buyout - mbo' MODULEIII MODULE IV Module V Strategic Financial Management Page School of distance education Strategic Financial Management Page School of distance education MODULE I UNIT FINANCIAL GOALS AND STRATEGY All types of organisations require financial management for its successful operations It contains components for the acquisition, management, allocation and financing of resources for successful growth of an organisation Every organisation should manage its finances effectively in order to attain its mission and goals Recently, the fields of strategic management and financial management combined together to evolve a new discipline namely Strategic Financial Management Strategic Financial Management refers to the study of finance with a long term perspective which takes into account the strategic goals of the enterprise Strategic Financial management is a management approach which makes use of various financial tools and techniques in order to come up with a strategic decision plan It also ensures the implementation of the chosen strategy so as to achieve the desired objectives The ultimate objective of strategic financial management is to identify the best possible strategy which may result in maximisation of organisations market value.Strategic financial management goes a step further in ensuring that the organization remains on track to attain its short-term and long-term goals, while maximizing value for its shareholders Strategic financial management is the identification of the possible strategies capable of maximising an organisation’s market value and the allocation of scarce capital resources among competing opportunities It also involves the implementation and monitoring of the chosen strategy so as to achieve stated objectives Strategic financial management is managing an organization's financial resources so as to achieve its business objectives and maximize its value Strategic financial management involves a defined sequence of steps that encompasses the full range of a company's finances, from setting out objectives and identifying resources, analyzing data and making financial decisions, to tracking the variance between actual and budgeted results and identifying the reasons for this variance The term "strategic" means that this approach to financial management has a long-term horizon Strategic Financial Management Page School of distance education The Chartered Institute of Management Accountants of UK [CIMA] defines Strategic Financial Management as “the identification of the possible strategies capable of maximising an organisation’s Net Present Value (NPV), the allocation of scarce capital resources between competing opportunities and the implementation and monitoring of the chosen strategy so as to achieve stated objectives CHARACTERISTICS OF STRATEGIC FINANCIAL MANAGEMENT The important characteristics of Strategic financial Management are the following:1 It is concerned with the long term management of fund with a strategic perspective It aims at maximisation of profit and wealth of the concern It is both structured as well as flexible It promotes growth, profitability and existence of the firm in the long run and maximises shareholder value It is an evolving and continuous process that constantly tries to adopt and revise strategies in order to achieve strategic financial objectives of the firm It involves innovative, creative and multidimensional approach for finding solutions to the problems It helps to formulate appropriate strategies and facilitates constant monitoring of action plans to match with the long term objectives It makes use of analytical financial techniques with qualitative and quantitative judgement on factual information It is result oriented combining of resources, especially of financial and economic resources 10.Strategic financial management offers a number of solutions while analysing the problems in the organisational context Strategic Financial Management helps in taking two broad financial decisions taken by financial managers They are Decisions regarding investments in the assets of the company Decisions regarding how such investments should be financed Strategic Financial Management Page ... goals Recently, the fields of strategic management and financial management combined together to evolve a new discipline namely Strategic Financial Management Strategic Financial Management refers... MODULEIII MODULE IV Module V Strategic Financial Management Page School of distance education Strategic Financial Management Page School of distance education MODULE I UNIT FINANCIAL GOALS AND STRATEGY... account the strategic goals of the enterprise Strategic Financial management is a management approach which makes use of various financial tools and techniques in order to come up with a strategic