Financial management is the management of asset purchase (investment), financing (financing), operating cash flow (working capital) and profit distribution under a certain overall goal.
Financial management is an integral part of enterprise management. It is an economic management work to organize enterprise financial activities and handle financial relations according to financial laws and regulations and financial management principles.
The main contents include: financial objectives and functions, the concept of valuation, market risks and returns, multivariate and factor valuation model, option valuation, capital investment principles, risks and real options in capital budget, etc.
Basic theory:
The theory of capital structure is a theory to study the relationship between corporate financing mode and structure and corporate market value. From 65438 to 0958, modigliani and Miller concluded that in a perfect and effective financial market, enterprise value has nothing to do with capital structure and dividend policy-MM theory.
Miller won the 1990 Nobel Prize in Economics for MM theory, and Modleya won the 1985 Nobel Prize in Economics. Modern portfolio theory and CAPM. Modern portfolio theory is about the best portfolio.
Markowitz put forward this theory in 1952, and his research conclusion is that as long as the returns between different assets do not change the perfect positive correlation, the investment risk can be reduced through asset portfolio, for which Markowitz won the 1990 Nobel Prize in Economics.