With the increase in privatization, liberalization and globalization policies all over the world, free enterprise system has come to play a key role in economic development of nations. In order for free enterprise system to develop, a good financial management has become very important to the economic health of business firms. The importance of financial management in any organization has increased tremendously in recent years because financial decisions have played a crucial role to the survival of the firm. It is more so because virtually almost all decisions have financial implications. Every activity of the organization or virtually everything that happens in organization is related to finance. Hence every one of us including non-finance executives should be familiar with financial management.
These days we find that the daily newspapers, radios, and televisions carry financial news. These news are concerned with such news as the growth and decline of firms, rise and fall in stock market indices, dividends, initial public offerings, and so on. If there is any event or incident, we try to relate it to the stock market indices. Thus, finance has become a way of life. In order to understand these developments and participate in them effectively, we must have knowledge of the principles and practice of finance.
This book aims at presenting the basic principles of financial management to facilitate sound corporate financial decisions in a simpler, short and lucid manner. As theory and practice are inseparable, the book also deals with practices of financial management abroad and in Nepal too. The book contains a set of concepts and principles for allocating resources over time and also a set of tools and techniques to evaluate alternatives, make decisions, and implement them.
Many of the concepts and principles included in this book are similar to those that can be found in other popular texts. However the readers may find some value added to them which may be seen as follows:
- Presentation of the theory in a nutshell and simple manner.
- Selected empirical evidences in and outside Nepal.
- Business practices abroad and in Nepal.
- Self-test questions with answers in brief.
- Questions for further discussion.
- Test questions.
- Self-test problems with solutions.
- Problems for further practice.
- Worldwide web exercises.
- Selected references.
The book has been designed so as to facilitate teaching and learning process that takes place in and outside the classroom. How far I have been successful in this direction, I am afraid, I might not have been successful in this regard. Hence, I appreciate if the concerned faculty, practitioners, and students could forward their suggestions and comments so that I can incorporate them with acknowledgement in the next edition of the book.
I will feel gratified if the students, faculty members, and executives who are interested in the study of financial management in any way, find this book useful.