Wednesday, May 11, 2016

10 Axiom in Financial Management

Axiom is intended in this case is a statement that has no basis in truth / has been proven true.

While the financial management according to Liefman is an attempt to provide money and use money to obtain or acquire assets.

In this case there are 10 axioms in financial management in the way that quote from, 10th axiom is very important for us to learn remedy understand about good financial management.usaha rumahan

Well here is the tenth axiom of financial management and its simple explanation.

1.Risk-Return Trade-Off
Is a statement that shows the trade-offs between risk with return, a consequence of the demands of cause and effect there.

In this case have a principle that the greater the risk of a job should return obtained will also be greater.

2.Time Value of Money
Well easy when we earn money at this time would be better than to accept the jumalah the same in the future. Menegapa so? Surely we aka wonder like that.

This is highly related to the value of money which will fall due to inflation. The decline in the value of money is encouraging the emergence of interest in the bank as a one form of anticipation that the future value of money does not fall from the current value.

10 axiom financial management
every year will definitely be inflation (image: Google)

Another thing we need to consider is the risk that exists. If we look now to the future we will not know the events that will happen.

The event will bring different consequences which can be detrimental as well as eliminate the opportunity to be able to earn some money.

That would be a pertimbanag to receive our money now or years to come. So we better take it now by the same amount anyway.

3.Cash-Profit-Is Not King
When we see a lot of entrepreneurs who will experience the hassle of taking care of business, this is because kesulian in the next financial year, but when viewed from his notes more profits increase.

Difficulties experienced businessman is one of them due to their focus on profits, but they ignore the cash flow.

When we see a careful businessman would align its cash flow, well those that are business-minded entrepreneur, not traders who merely seek profit pendak term.

Not that profit is not important, you know, but it ignores the cash is a business negligence.bisnis rumahan

4.Incremental Cash Flows Count
A cash flow relating to investment, in which decision-making is done on the basis of impact it will have on the current financial condition of the project is accepted and the project is not acceptable to do.

5.The Curse Of Competitive Markets
Intense competition divides the market into small sections, this is due to the increasing number of manufacturers that compete in the same product market where the same is also the result of sluggish business.

In these conditions indicates that is not the profit can be obtained in large quantities, the small profit reception resulted in little return on investment.

Premises so we need to keep our businesses can compete maintain its market, its business as divertasi products, procurement of raw materials, the use of appropriate technology to minimize costs.

6.Efficient Capital Markets
Man is a capital markets firm has fast motion and the price is right, too. The efficiency of the capital market judged on the success preformance combine and harmonize information.

7.The Agency Problem
Usually the problems in the company between managers and shareholders, which is where the manager was entrusted to manage the company and gave the benefit of all the company's business activities so that shareholders benefit from the company's profits.peluang usaha

Well the problem is often the manager would not work for holding stocks if they are not aligned with their interests.

Managers will menegambil policies that will benefit them, unless there is an agreement that explains how incentive structures can accommodate the interests of both sides.

8.Taxes Bias Business Decisions
Tax consideration is used as the basis of decision-making to a business activity. For that financial management is concerned is all the decisions and calculations shall be after taxes.

9.All Risk Not Equal
Sure we know that every business must have a different risk, for that we need to invest efforts in different fields to anticipate the risks that result in collapse of his business.

10.Ethical dilemmas Are Everywhere In Finance
Ethics is a normative value that must be adhered someone wherever he is. Often we have a dilemma in the midst of the business we do.

This is because there is a particular interest of every individual. Now we know that there must be a rule in the company "unversal" which we call the corporate culture that is used to direct the employees to be committed to the values ​​of good.cara membuat email

Usually ethics inexcusable error, but could kill someone Kariri. Because ethics violators would be punished because of social ethics violations are betting integrity required as the value of the corporate culture.

Many explanations about 10 axioms financial management, may be useful for us all. Thank you for reading our article, see you in another article.