Ten principles that form basic financial management?

Ten principles that form basic financial management?
10 PRINCIPLES THAT FORM THE BASICS OF FINANCIAL MANAGEMENT

1. THE RISK-RETURN TRADE-OFF--WE DON'T TAKE ON ADDITIONAL RISK UNLESS WE EXPECT TO COMPENSATED WITH ADDITIONAL RETURN

2. THE TIME VALUE OF MONEY- DOLLAR RECEVIED TODAY IS WORTH MORE THAN A DOLLAR RECEIVED IN TH FUTURE.

3. CASH--NOT PROFITS--IS KING
In Measuring wealth or value, we will use cash flows, not accounting, as our measurement tools.
Remember:
It is cash flows, not profits that are actually received by the firm and can be reinvested.

4. INCREMENTAL CASH FLOWS -IT'S ONLY WHAT CHANGES THAT COUNTS

5. THE CURSE OF COMPETITIVE MARKETS -WHY IT'S HARD TO FIND EXCEPTIONALLY PROFITABLE PROJECTS


6. EFFICIENT CAPITAL MARKETS - THE MARKETS ARE QUICK AND PRICES ARE RIGHT.

7. THE AGENCY PROBLEM -MANAGERS WON'T WORK FOR OWNERS UNLESS IT'S IN THEIR INTEREST.

8. TAXES BIAS BUSINESS DECISIONS

9. ALL RISK IS NOT EQUAL-SOME RISK CAN BE DIVERSIFIED AWAY, AND SOME CANNOT

10. ETHICAL BEHAVIOR IS DOING THE RIGHT, AND ETHICAL DILEMMAS ARE EVERYWHERE IN FINANCE