Financial Management Concept

Financial Management

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY ..................................................................................................................................1
Question 2 Right issue.................................................................................................................1
Question 3 Investment appraisal techniques................................................................................6
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Financial management refers to controlling, managing, directing, evaluating the business
operational activities of the business organisation. It obtain the required fund and utilized in the
business to effective operation of the business function (Castrogiovanni and et. al 2016). It also
apply the basic accounting concepts, general principle in the financial activities of the entity.
Financial management is generally concerned with regular and adequate supply of fund in the
enterprises. It may cover the
financial aspects such as capital requirement, source of fund, investment fund, management of
cash and financial control over the enterprises. In the subject of financial management some of
the basic concepts includes that is defined in this report. For the better understanding of the
financial function in the business, report includes earning per share and right issue concept foer
brand plc and investment appraisal techniques of a food manufacturing company lovewell Ltd.
This report of the financial management is beneficial for the management of the particular
companies in the decision making process regarding company's earning or net profit and how
much amount cost to the company for issue price. And business can make decision regarding the
investment proposal that will be benefited for the organisation lovewell Ltd. So they can make
decision which option is best for organisation as well as increase the profitability in present
situation.
MAIN BODY
Question 2 Right issue
Right issue:
Right issue is basically share that are provided by the company to existing shareholder to
the company. It is also called as right offer. In the basic terms, it is defined as when a enterprises
require some additional capital in the business than it goes to present shareholder for the purpose
to issue the share at discount price for these existing shareholders. It is invitation to stakeholders
to purchase the share in the company at certain discount on market price (Cummins and Derrig,
2012). These are some benefit of the right issue that are discussed as below:
 The main benefit to the shareholder is shares are issued at less price so they can purchsed
it on discount or minimum price from market rate.
 All the benefit are the same that is given on ordinary share such as dividend, bonus share.
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