FINANCIAL MANAGEMENT:

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1.1 INTRODUCTION TO FINANCIAL MANAGEMENT:
Finance in the modern business world is regarded as lifeblood of business at enterprise.
Finance function has become so important that it has given birth to financial management
as a separate subject. So this subject is acquiring universal applicability. Financial
management is that managerial activity which is concerned with the planning and
controlling of the firms financial resource as a separate activity of decline is of recent
origin, it was a branch of economics till 1980. Still today it has no unique body of
knowledge of its own and it dreams lively on economies for its theoretical concepts.
Financial management is broadly concerned with the acquisition and use of funds by a
business firm. It deals with:
* How large should the firm be and how fast should it grow
* What should be the mix of the firms financing?
* How should be the firm analysis, plan of control its financial affairs?
While the first three questions express extra salmons conception of financial management
as discussed in his clerical work, The theory financial management. The forth one
represents an addition that is very relevant in the light of the responsibilities surrounded by
financial managers in practice. The modern thinking in financial management records
greater importance to management in decision making and formation of policy.
Financial management occupies key position in top management and plays a dynamic role in
solving complex management problems. They are now responsible for snapping the fortunes
of the enterprise and are involved in allocation of capital.
1.2 OBJECTIVES OF THE STUDY:
To know how efficiently the company is using its resources.
To determine the financial soundness of the firm i.e., liquidity of the firm.
To know about causes for changes in financial position from time to time.
To evaluate the performance of the unit through ratio analysis.
To know the liquidity position of Oil and Natural Gas Corporation Limited.
To judge the solvency of the firm by working out leverage ratios.
To understand the practical implication of ratio analysis at industry level.
To make suitable recommendations based on critical findings.
1.3 NEED OF THE STUDY:
The Primary requirement of this study is academic and part of my MBA course study. I opted
to do my study on the subject of Analysis of Financial Statements of ONGC Ltd.
The financial statements of a company are to convey its financial performance to owners,
creditors and the general public.
They are used as bases for decisions by all those interested in the enterprise.
All the investment decisions of equity share holders either by financial institutions or
general public are depending upon the strengths and weaknesses of the financial
parameters of the company.
1.4 SIGNIFICANCE OF THE STUDY:
The study of financial statements is helpful to following groups.
The study of financial statements is useful in analyzing the various areas where certain
measures can be taken for improvement.
The study is helpful for Investment Bankers, Financial Institutions and General public with
reference to their investment in ONGCL equity in stock market.

 This study is more useful to academicians and scholars to make for the insight into the
various aspects of the financial statements analysis in others similar organizations.
Studies of this type are also useful to policy makers. To make necessary changes in the
policies to know financial feasibility of the company at glance.

International Finance Prof. A. K. Misra

Department of Management
Indian Institute of Technology, Kharagpur
Lecture - 25 Evaluation of Foreign Direct Investment
Let us discuss section 25 that is on foreign direct investment. What is the positive
negative aspect of foreign direct investment, and how we can evaluate foreign
direct investment using the project evaluation methods particularly the NPVIRR
method. Before that you have to discuss why, what is the difference between
foreign direct investment and foreign portfolio investment. How foreign direct
investment is good for the country comparing to foreign portfolio investment, and
what are the positive and negative aspect of foreign direct investment, and end of
this session we will be discussing about the evaluation aspect of foreign direct
investment using a practical example.