Download - Introduction to Finance
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Introduction to Finance
How many of you want to start a business of your own?
Do you think basic knowledge of finance can help you in sound
decision making?
Firms to run its operations requires….
CAPITAL
What is the source of this capital?
•You put your own funds•You get it from outside D
E
Capital Structure
Now every source of capital has some cost associated with it?
•Equity Opportunity Cost•Debt Rate of Interest
Cost of Funds
What is the objective of the firm?
Maximization of the Economic Profits!!!!
Where does a financial manager fit into the picture?
Ensuring profitability by:Allocation of funds into profitable projectsEmploying various sources of raising funds to reduce the overall cost of funds
Equity Preferential Equity
FCCB ECBBank Loans
Reserves
NPVIRR
PI
Source of funds
Application of Funds
Own Equity
Inter Bank Lending
RBI
Deposits
Lending
Investments
Regulatory Compliance
How does a Bank work
Banking
Retail Banking
Private Banking
Commercial Banking
Divisions in all 3 Banking
Relationship Management Products
Risk Operations
Legal Treasury
Important Points
Customer Acquisition & Portfolio Management
Customization
Diversification of Risk
Customer Retention
Asset Management
Wealth Management
Retail & HNI Broking Insurance
Structured Products
Non Banking Financial
Companies
Other Financial Services
Investment Banking
Capital Raising
M&A
Product Structuring
Certifications
FRM – US, GARP
CFA – US & ICFAI
NCFM
Net Present Value - NPV• The difference between the present value of cash
inflows and the present value of cash outflows
Internal Rate Of Return• The IRR of a project is the discount rate that will give it
a net present value (NPV) of zero.
Flavor of Corporate Finance
Using the project cash flows presented in the table below, compute the NPV, IRR, PI, Payback Period of each project cash flows &State according to you which project should be accepted. Assume cost of capital is 10%.
Year(t) Project A Project B
0 -2,000 -2000
1 1000 200
2 800 600
3 600 800
4 200 1200
Flavor of Corporate Finance
THANK YOU
Team $treet :-
Apurva Agarwal
Bikash Kedia
Ritom Das
Rohit Bafna
Saurabh Bansal
Simant Goyal
Sonam Gupta