General Policies and Financial Policies Before discusing Financial Policies, we start first to define Policy as the set of principles and concepts established by the higher levels of the organization to guide other management levels when carrying out their activities and making their decisions. Policies are considered a constitution for action because they are the […]
Return On Investment Before talking about Return On Investment ROI, it is recommended to define the meaning of the terms Investment and Return, as this is a necessary beginning to be able to clarify the rest of the subject elements. The concept of Investment There are two common investment concepts, which are: First concept of
DuPont Analysis Model for Financial Analysis The Dupont Analysis model for financial analysis, which is a model named after the company that developed it, the American company DuPont. The idea of this model, which has gained wide fame, as an effective tool in analyzing and controlling financial performance and knowing sales profitability and productivity assets.
Return on Assets Definition Return on Assets or (Revenue Power) is a standard in measuring profitability that is based on the relationship between the profit of operations and the assets that contributed to its achievement. The Return on Assets (ROA) is defined as the ability of a particular investment to achieve a return as a
Financial Management Objectives (3) Profitability Profitability is a basic goal for all institutions, a necessary for their survival and continuity, a goal that investors aspire to, and an indicator that creditors care about when they deal with the institution, and it is also an important tool for measuring the efficiency of management in using the
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Financial Management Objectives (2) Liquidity Liquidity expresses the institution’s ability to meet its expected and unexpected short-term obligations when due through the normal cash flow resulting from its sales and collection of its receivables in the first degree, and by obtaining cash from other sources in the second degree. Liquidity Concepts There are two concepts
Financial management objectives The objectives of Financial Management revolve around the balance between maintaining the existence of the institution and protecting it from the risk of bankruptcy and liquidation and achieving an appropriate return on investment. Within this general framework, the objectives of the financial management in the institution can be defined as follows: Each
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Financial Management Functions Organization of the financial management functions Financial management functions has two concepts: The first concept: Financial management, which means the financial function or the financial activity in the institution, and this function includes the process of identifying financial needs and providing appropriate funding for them and then using them in the acquisition
Introduction to Financial Management Brief History of Financial Management Since financial management separated from economics at the beginning of this century and became a separate discipline in its own right, it is subject to many rapid developments. When financial management began as an independent science, it was limited to topics related to financial instruments and