Development from the financial teachings to the modern finance management

The traditional beginning of the financial teachings is characterized by the external viewpoint, i.e. the view comes primarily from the view of the financial sources, thus the owner and creditor. In the center are located the description and discussion of the financing forms as well as enterprise facts, which have crucial effects on the financing of the enterprise within its life cycle. To these particularly treated facts belong the establishment of enterprises, its liquidation, the capital increase and the capital impairment. The description of the capital forms was treated ago descriptively by the side of the financing technology. A goal was the adherence to certain balance structure rules. The capital requirement represents a given size in the traditional beginning, so that the question of the covering of this need is the center of attention.

In contrast to this newer beginnings of the finance management place the connection between investment and financing matters into the center of the view. The finance management covers therefore the theory and technology of the capital applying including the Kapitaltilgung and the investment. Thus both the acquisition and the arrangement of financial means are treated. A further new beginning is the so-called capital market-oriented beginning. The characteristics of the beginnings are in summary represented in the following table (see for this Finance management, 6. Edition Wiesbaden 1996).

Traditional beginning

1. External viewpoint (coined/shaped by banks)
2. Descriptive method
3. Isolatingness of the financial decisions regarding the procurement of capital
4. Efficiency criterion: Observance of balance structure standards

Management and decision-oriented beginning

1. Internal viewpoint (analytic, optimization)
2. Analytic method
3. Simultaneous decisions over procurement of capital and - use
4. Efficiency criterion: Contributions for success and risk position

Capital market-oriented beginning

1. External viewpoint
2. Analytic method
3. Demands for net yield of the financial sources are understood as capital costs of the enterprise
4. Efficiency criterion: Exchange rate value maximization

see also

• Corporate Finance
• Cash management

Articles in category "Finance management"

We found here 12 articles.

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