Principles of Finance

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Practice Ethical Behavior
* The Institute of Management Accountants lists the principle of ethical behavior as the "...obligation to the public, their profession, the organization they serve, and themselves, to maintain the highest standards of ethical conduct" that include competence, confidentiality, integrity and objectivity. Don't Risk Without Significant Return

* Risking profits for poorly designed projects violates a basic principle of financial management. The capital market theory of financial management involves increased return with less risk. Mathematical formulas calculate the risk. * Sponsored Links

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Design a Realistic Budget
* Realistic budgeting involves a master budget and separate capital and operating budgets. Budgets translate the objectives into detailed plans, according to the International Agricultural Research Centers of the World Bank. Safeguard Against Loss

* Financial management requires instituting safeguards against losses. Safeguards vary with individual projects. While safeguards are not foolproof, a set of safeguards must be in place. Expect Competitive Markets

* Projects operate in the middle of the market and face competition from other financial projects. Management must plan for competitive markets in soliciting funding and marketing a product or service. Locate Efficient Capital Markets

* Capital is money placed in an investment. Capital markets involve long-term financing for investments. Location of funds for both short- and long-term investment is required for sound financial management. Locate Quality Managers

* Financial management requires flexibility in dealing with the unknowns. Quality, competent managers handle "a vast range of unknowns," according to Geoffrey T. Boisi, former administrator at J.P. Morgan, Chase and Company and office holder at the Beacon...
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