phool chand.pptx

8/14/2019 phool chand.pptx

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Presented by:Phool ChandMBA 3rd SEM

Various issues related tofinance in SMEs


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Finance:

Finance is the art and science of managing money.

-M Y Khan

Financial management:

Financial management is concerned with theduties of the financial managers in the business firm.


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Importance of Finance in M!s:

Finance is the life bloodof any business.

Finance is one of the basic re"uirements of apro#ect.


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M!$ as an important segment of the Indian!conomy:

%& of '()

*+ & of the industrial units

small-scale industries , I produce about %products

/ & of output in manufacturing sector

/ & of total e0port

!mployment of about 1 million people


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2ategori3ation of enterprises on the basis of financial In4estment:

Micro $ small and medium enterprises de4elopment 5ct.6 7:

8.Manufacturing enterprises:

Micro enterprises:In4estment96+ la h

mall enterprises:

6+ la h9In4estment; + crore Medium enterprises:

+ crore9In4estment;8 crore


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Micro $ small and medium enterprises de4elopment 5ct. 6 7:

6. er4ice enterprises:. Micro enterprises:

In4estment98


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2ategori3ation of M!s on the basis of financialstrength = performance capability:

Financial trength

>igh Moderate ighest !85 !8? !82

>igh !65 !6? !62

Moderate !15 !1? !12

@ea !/5 !/? !/2

)oor !+5 !+? !+2


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Financial re"uirement of small enterprises:finance

Fixed investment

Land Building Machinery

Work in process

Sundry debtors Expenses stocks Finished goods

Working capital

Land Building Machinery

Work in process

Sundry debtors Expenses stocks Finished goods


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ource of finance in M!s:

?usiness growth

ource of finance

Aenturecapital

?usinessangels


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?usiness growth:

Internal

!0ternal


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Internal source of finance:

Beser4e surplus

Crganic growth: growth generated through thede4elopment and e0pansion of the business itself.

'enerating increasing sales

Dse of retained profit

ale of assets

)ro4isions ,ta0ation = depreciation


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!0ternal source of finance:


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2ont

2. Loans:

. (ebentures

. ?an loans

.

Merchant or in4estment ban s

. go4ernment


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hort term:

?an loans

C4erdraft facilities

Grade credit

Factoring


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Inorganic growth:

5c"uisitions

Merger

Ga eo4er


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?usiness angels:

Indi4idual loo ing for in4estment opportunities

'enerally small sums


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Aenture capital:

)ooling capital in the form of limited companies.


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Financial assistance to medium-scale enterprises:

1 !"# $nterest rate for units located at back%ardarea on loan &s! " Lacs

1'!"# $nterest rate for units located at non

back%ard area&epayment period max! 1( years!


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2onclusion:

Finance$ which has been aptly described as the life blood of industry is a pre-re"uisite for themobilisation of real resources to organise productionand mar eting. (epending upon the nature of theacti4ity to be financed$ business re"uires short- term $medium term and long term finance.


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Beference:

Ghe (ynamics of !ntrepreneurial (e4elopment andManagement

- Aasant (esai

!ntrepreneurship and mall ?usiness Management

- M ? hu la

Financial management

- M Y Khan

www.google.com


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