- Assessment of financial soundness

Financial Planning

Financial organization:

Financial Direction

FloatinFinancial control

a) Major Component of Equity : shareholding and investment from the company owners

b) Main Component of Debt: involves borrowing which has to be repaid with interest.

c) Pecking Order Theory states that firms tend to choose external financing last after using cheaper external and internal resources.

d) Irrelevance Theory states that the ideal efficient capital structure does not affect the value of the company if market conditions are efficient and there are no taxes.

a) Portfolio theory by Markowitz (1952), states that portfolio diversification reduces investment risk without sacrificing the expected rate of return.

b) Aspects of liquidity management by Baumol (1952) companies need to maintain a balance between maintaining a level of liquidity sufficient to meet financial obligations and avoiding the withholding of high liquidity financing.

a) Assessment of investment projects Net Present Value (NPV), Internal Rate Of Return (IRR), and Payback Period

b) According to Brigham (2016), investment analysis also involves non-financial aspects, such as environmental impact, regulatory compliance, and company reputation

) Risk management theory identification process Crucial first step

b) SWOT (Strenghts, Weakness, Opportunities, Threats) analysis and sensitivity analysis

c) Jarrow and Turnbull (1995) state that, risk measurement is key in understanding the potential impact of risk on company performance.

a) Effective cash strategy involves the use of tools

- Budgeting

- Cash analysis

- Close monitoring of projective cash flows

- Create an efficient tax structure

- Utilize available tax intensives

- Identify legal ways to reduce the company's tax liability

Summary of financial position

- Income statement

- Cash flow

- Financial ratio analysis

- Interpretation of financial statements

- Assessment of financial soundness