INTRODUCTION TO FINANCE

Financial management refers to the management of finance it is the effective & efficient utilization of financial resources. It means creating a balance among financial planning, procurement of funds, profit administration and sources of funds. The Financial management is defined as follows: According to SOLOMAN, Financial management is concerned with the

efficient use of an important economic resources, namely, capital funds. According to HOWARD AND UPTON, Financial is the application of the planning functions. and management

control functions of the finance

OBJECTIVES OF FINANCIAL MANAGEMENT

The main objective of a business is to maximize the owners economic welfare. There are two types i.e, 1. Profit maximization. 2. Wealth maximization.

IMPORTANCE OF FINANCIAL MANAGEMENT

Financial business management is indeed, the key to successful

operations. With out proper administration and effective utilization of enterprise can utilize its potentials for growth and

finance , no business expansion.

Financial

management

is concerned

with the acquisition, goals in mind. As

financing and management of assets with some overall

mentioned in the contents of modern approach, the discussions on Financial management can be divided into three major decisions viz., 1. Investment decision 2. Financing decision and

3. Dividend decision

Financial decisions ns

Investment decision

Financing decision

Dividend decision

firm takes these decisions simultaneously and continuously in the normal

course of its business.

1 .INVESTMENT DECISION: The investment decision relates to the selection of assets in which funds

will be invested by a firm. The assets which can be acquired fall into two broad groups. .long term assets time in future. short term or current assets defined as those assets which in the normaly course of business are convertible into cash usually with in a year. which will yield a return over a period of

2. FINANCING DECISION: The second major decision involved in financial management is the financing decision. The investment decision is broadly concerned with the asset mix or the composition of the assets of a firm. The concern of the financing decision is with the financing mix or capital structure or leverage. The term capital structure refers to the proportion of debt and equity capital.

3.DIVIDEND

DECISION:

The third major decision of financial management is the decision relating to the dividend policy. The dividend decision relating to the dividend policy. The dividend decision should be analyzed in relation to the financing decision of a firm. Two alternatives are available in dealing with the profits of a firm they can be distributed to the share holders in the firm of dividends or they can be retained in the business which course should be followed dividend or retention.

RATIO ANALYSIS
Ratio analysis is the process of determining and interpreting numerical

relationships based on financial statements. By computing ratios, it is easy to understand the financial position of the firm. Ratio analysis is used to focus on financial issues such as liquidity,

profitability and

solvency of a given firm.

WHAT IS A RATIO?
Ratio is simply a number expressed in terms of another. It refers to the numerical or quantitative relationship between two variables which are

comparable. This

relationship can be exposed as

Percentages Fractions Proportion of numbers

It is an expression derived by dividing one statistical

variable by the other It is a

measure that provides an insight into the relationships between

two variables. Ratios used rightly may even develop understanding and stimulate thinking . ratios can be expressed quotients also . in terms of percentages, Proportions ,

TYPES OF RATIOS:
Based on their nature, the ratios can broadly be classified into four categories:

Liquidity ratio

Types of ratios

Activity ratio

Solvency (or) leverage ratio

Profitability ratio

NEED FOR THE STUDY

A ratio can be conceptualized based on the need. There are significant variations in the ratios used in different firms of the same industry. The need to study ratio analysis is to analyze the financial performance of

LANCO. This gives an insight into the firms past as wel l as the current financial and operational performance. Ratio analysis is not an end itself. It is one the method for better understanding of financial strengths and weakness of a firm. Comparison of the calculated ratios with the standard ratios. It is possible to know the financial performance. So it is necessary to study the ratio analysis of LANCO POWER pvt Ltd.

Scope of the study

The study is based on the quantitative data provided by

company and study was carried for a period of 6 weeks. The study is done with the help of finance department of the company. The study is focused on current financial company. The study is completely confined to GENTING LANCO PVT LTD. position of the

OBJECTIVES OF THE STUDY

1. To know the profile of the GENTING LANCO PVT Ltd. 2. To study the financial policies followed by the GENTING LANCO . 3. To assess the financial performance of GENTING LANCO by analyzing various ratio. 4. To examine the trends of GENTING performance. 5. To find out the constraints performance. and to offer suggisions for improving the LANCO recgading of financial

METHODOLOGY
The total data required for the study has been collected by using the primary data and secondary data and collection was made in the following manner. The Primary Data has been collected with the help of officials of the organization and collected data regarding the hierarchy, structure, policies, vision, mission proceduresetc The study is largely based on secondary data collected in the following way company annual reports. company journals. magazines. web sites and annual reports, etc.., published by the organization.

LIMITATIONS
1. The present study is intended to cover a period of 5 years from 2007 to 2012 for examining financial performance. 2. The analysis depends upon the data (numerical, quantitative) provide the GENTING LANCO PVT LTD. 3. The performance of the company (LANCO) is assessed by using by

liquidity ratio, activity ratio, profitability ratio and capital structure ratio. 4. The ratios are computed based on the past data (or) previous

performance. They may not necessarily hold good in the future and may not be helpful in making projections into future