First, the objectives of financial management

1, maximizing profits;

2. Maximize the income of management;

3. Maximize the wealth (value) of the enterprise;

4. Maximize social responsibility.

Second, the content of financial management

1, financing management;

2. Investment management;

3. Working capital management;

4. Profit distribution management.

Third, the basic theory of financial management

(1) capital structure theory (capital structure)

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.

(2) Modern 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 perfectly and positively, the investment risk can be reduced through asset portfolio. Markowitz thus won the 1990 Nobel Prize in Economics.

Capital asset pricing model is a theory to study the relationship between risk and return. Sharp and others concluded that the risk return of a single asset depends on the risk-free return, the risk return of market portfolio and the risk of risky assets. Sharp won the 1990 Nobel Prize in Economics.

(3) Option pricing model.

Option pricing theory is a theory about determining the value or theoretical price of options (stock options, foreign exchange options, stock index options, convertible bonds, convertible preferred stocks, warrants, etc.). ). Scholes put forward the option pricing model in 1993, also known as B-S model. Since 1990s, option trading has become the main theme in the world financial field. Scholes and Morton won the Nobel Prize in Economics in 1997.

(4) Efficient Market Hypothesis (EMH)

Efficient market hypothesis is a theory to study the degree of information reflected by securities prices in the capital market. If the capital market fully reflects all the relevant information of securities prices, it is said that the capital market is effective. In this market, it is impossible to get economic benefits from securities trading. Fama is the main contributor to this theory.

(5) Agency theory.

Agency theory is to study the agency cost under different financing methods and different capital structures, and how to reduce the agency cost and improve the company value. The main contributors to this theory are Zhan Sen and McCullough.

(6) Asymmetric information theory.

The theory of information asymmetry means that people inside and outside the company have different understandings of the actual operating conditions of the company, that is, there is information asymmetry among the relevant personnel of the company, which will lead to different judgments on the value of the company.