A statistical survey is a scientific process of collection and analysis of numeric data. Human population survey is used in government, health, social science, and marketing sectors. The need for new data starts when data do not yet exist or when existing data do not fully satisfy the needs of the person or organization.

Stages of a Statistical survey:

Statistical survey involve two stages, a) planning and b) execution

Planning:

Step-1: Identify Your Objective :

Nature of the problem to be investigated should be clearly defined in an unambiguous manner.  There should be clear, precise and unambiguous reasons to collect data. We should be clear about the information we want to learn from the survey, and the actions we want to take once the survey is done and analyzed. If there is no clear objective of the survey then the assignment of the survey may result in wastage of resources.

Step-2: Do the cost Estimation:

Verify an existing statement for the survey. Decide the unit of measurement. Find relations between characteristics and define the scope of the survey. The cost of the survey depends on the scope of the survey and population size. Costing in terms of time required, mailing questionnaires, collecting responses, carrying out interviews should be considered.

Step-3: Plan the Logistics: 

The scope of the survey decides areas to be covered and units to be studied. It also specifies the accuracy of the data required. Using these logistics for the survey are finalized. Depending upon the scope the method of data collection (census or sample) is decided. Then the method of approaching the participants (phone, email, in-person interviews, postal mail, etc.), type of data (primary or secondary), the time required for the survey, selection of people for collecting data is finalized.

Step-4: Analyze Your Resources: 

It is checked whether the previous survey carried out is sufficient to satisfy the scope of the survey. Resources (both internal and external) should be identified in the light of the scope and proposed logistics for the survey. If internal resources are not sufficient outsourcing should be done and the work is got done by some external agency.

Step-5: Organize the Survey: 

Before actual execution of the survey, a chronological and detailed timetable for each step of the project is to be made. Each task in each step should be explained in detail in sequence. This step avoids confusion, repeatability. It also avoids wastage of resources due to lack of accountability.

Step – 6: Training of Personnel:

In this step, the training is given to investigators, enumerators and supervisors as per need of the survey

Execution:

After planning procedure data is collected by execution survey. Control methods are used to check the accuracy, coverage, methods of measurements, analysis and interpretation. Then the collected data is carefully edited, classified, tabulated and presented in form diagrams, charts and graphs. Using this information inference of the survey is obtained.

Terms Used in Statistical Survey:

Units or Individuals:

The objects on which the characteristics are measured is called an individual or unit.

Population or Universe:

The totality of all units or individuals in a survey is called population or universe. If the number of individuals in the population is known it is called finite population and if it is not known, the population is called infinite population.

Example: During the study of employees in the marketing department, all the members of the department form population, while individual member forms the unit of population.

Parameter:

The measure of describing the characteristics of the population is called as a parameter.

Example: Age of person, the height of a person etc.

Sample:

When the population is very huge, it is not possible to study each and every individual of the population, then the sampling method is used. A subset or part of the population is called sample.

Example: There is 50 sales personnel in the sales department, then predetermined numbers (say 5) selected out 50 is called the sample.

Statistics:

The measure that describes characteristics of the sample is called as statistics.

Quantitative Characteristics:

A characteristic which is numerically measurable is called quantitative characteristics.

Examples: Age of managers, Height of persons, No. of children in a home.

Qualitative Characteristics:

A characteristic which is not numerically measurable is called qualitative characteristics. It is a description of attributes or properties that an object possesses.

Example: Beuty, intelligence, smoothness, durability.

Variable:

In a population, some characteristics remain the same for all units and some other varies from unit to unit. The qualitative characteristic that varies from unit to unit is called a variable. It is measurable characteristics.

Example: age, height, income. etc.

Attribute:

The qualitative characteristic that varies from unit to unit is called attribute. It is non-measurable characteristics.

Example: Intelligence, beauty, nationality, religion, etc.

Collection of Primary Data:

Primary Data:

• Data collected for the first time keeping in a view the objective of the survey is called primary data.
• It is collected by personal interview, questionnaire, through telephones and mails. It is collected by census method or sampling method.

Advantages of Primary Data:

• It is collected with specific goals and purpose which cuts out the possibility of wasting of resources.
• It is reliable because the researcher can replicate the procedure to check the results, due to the knowledge of procedures of data collection and analyzation.
• It is up-to-date- data since it is collected fresh.
• This data is collected from the population in question, hence can be considered as authentic and thus bias of third parties can be avoided.
• The course of the survey can be changed anytime as per the new requirement of the survey.

Disadvantages of Primary Data:

• It is the costliest method of data collection.
• It is a time-consuming method.
• This method requires a large sample space for the credibility of the data obtained.

Previous Topic: Characteristics, Functions and Limitations of Statistics

Next Topic: Collection of Primary Data

Management > Managerial Statistics > Stages in the Statistical Survey

The post Stages in the Statistical Survey appeared first on The Fact Factor.

The planning, directing, monitoring, organizing, and controlling of the monetary resources of an organization is called financial management.  It is the art and science of managing money It is concerned with procurement and effective utilization of funds for the benefit of its shareholders. It utilizes all those managerial activities that are required to procure funds at the least cost and their effective deployment.

The scope of Financial Management:

Investment Decision:

The investment decision involves the evaluation of risk, measurement of the cost of capital and estimation of expected benefits from a project.  Investment decisions involve decisions with respect to composition or mix of assets Capital budgeting, working capital decisions, and liquidity are the major components of investment decision.

• Capital Budgeting: These are investment decisions which include investment in fixed or permanent assets which would give returns or yield earnings in the future or replacement and renovation of old assets. Capital budgeting is a very important decision as it affects the long-term success and growth of the organization. It is a difficult process because it involves the estimation of costs and benefits which are uncertain and unknown at the time of decision.
• Liquidity: Liquidity refers to how easily assets can be converted into cash. Cash is the most liquid asset. Assets like stocks and bonds are very liquid since they can be converted to cash in a short time.  However, large assets such as property, plant, and equipment cannot be easily converted to cash in a short time. The finance manager must maintain an appropriate balance between fixed and current assets in order to maximize profitability and to maintain desired liquidity in the firm.

Working Capital Decisions:

Current assets are those assets which are convertible into cash within an accounting year. While, current liabilities are those liabilities, which are likely to mature for payment within an accounting year.

These are the decisions which include investments in current assets (which include receivables, inventory, short-term securities, etc.) and current liabilities (which include creditors, bills payable, bank overdrafts, outstanding expenses, etc.)

Financing Decisions:

Financing decisions involve decisions about the financing mix or the financial structure of the firm. These decisions involve the raising of finance from various resources which will depend upon the decision on the type of source, the period of financing, cost of financing and the returns on it.

The finance manager must develop the best finance mix or optimum capital structure for the firm such that a proper balance between debt and equity is maintained and the return to equity shareholders is high and their risk is low. Use of debt or financial leverage affects both the return and risk to the equity shareholders.

Dividend Decisions:

The main objective of financial management is wealth maximization for shareholders. Hence an appropriate dividend policy must be developed. Net profits are generally divided into two parts a) dividend for shareholders and b) retained profits.

Thus the finance manager has to make a decision whether to distribute all the profits in the form of dividends or to distribute a part of the profits and retain the balance. He has to make the decision about the optimum dividend payout ratio. The retained profit must be employed in the investment opportunities available to the firm, plans for expansion and growth, etc.

Core Elements of Financial Management

Financial Planning:

Management needs to ensure that enough funding is available at the right time to meet the needs of the business. Financial planning is done to ensure the availability of capital investments to acquire real assets (which include lands, buildings, plants, and equipment). For this long or medium-term finance is required. In the short term, funding may be needed to invest in equipment and stocks, pay employees and fund sales made on credit. Financial planning is required for establishing and running the business smoothly.

Financial Decisions:

These are the decisions need to be taken on the sources of finance required for capital investments. There are two sources of funds the debt and equity. Finance manager takes the decision in what proportion the funds are to be obtained from these sources so that the objective of wealth maximization of shareholders is achieved.

Financial Control:

Financial control is a critically important activity to help the business ensure that the business is meeting its objectives. It involves managing the costs and expenses of a business. It includes making decisions on the routine aspects of the day-to-day management of collecting money which is due from the firm’s customers and making payments to the suppliers of various resources.

Objectives of Financial Management:

Profit Maximization:

The main aim of any kind of economic activity is earning a profit. It is the measuring tool for the economic success and efficiency of the firm. Hence the main objective of financial management is profit maximization. The finance manager tries to earn maximum profits for the company in the short-term and the long-term.

Due to the uncertainty in the business, the finance manager cannot guarantee profits in the long run but ensures that the firm can earn maximum profits even in the long run by taking proper financial decisions and optimally utilizing the funds available through finance.

Wealth Maximization:

Wealth maximization (shareholders’ value maximization) is also the main objective at par with profit maximization of financial management. Wealth maximization means to earn maximum wealth for the shareholders. This objective is a universally accepted concept in the field of business to overcome limitations of profit maximization.

The wealth maximization is possible only when the company pursues policies that would increase the market value of shares of the firm. The market value of the shares is directly related to the performance of the firm.  Also, the finance manager tries to give a maximum dividend to the shareholders.

Proper Estimation of Total Financial Requirements:

The finance manager must estimate the total financial requirements of the company. He has to do cash budgeting for fixed assets requirements, working capital requirements by considering the liquidity. If the proper estimation is not done there is a shortage or surplus of finance. During estimation, the finance manager has to consider the type of technology used, the number of employees employed, the scale of operations, the legal requirements, etc.

Prepare Capital Structure:

Capital structure decides the ratio between owned finance and borrowed finance (debt-equity ratio). It brings a proper balance between the different sources of. capital. This balance is necessary for the liquidity, economy, flexibility, and stability of the firm.

Proper Mobilization of Finance:

After estimating the financial requirements and preparing the capital structure of the firm, the finance manager must decide about the sources of finance. Shares, debentures, bank loans, etc. are different sources of finance. There must be a proper balance between owned finance and borrowed finance (debt-equity ratio). The finance manager should ensure that the firm gets finance at a low rate of interest. It reduces the cost of capital.

Proper Utilization of Finance:

The finance manager must make optimum utilization of finance. He must use the finance profitable so that there is wealth maximization for shareholders. The finance should not be utilized in unprofitable projects of the firm. The finance should not be blocked in inventories. The credit period should be short. He should ensure to reduce the operating risks due to the uncertainties in business. It can be done by avoiding high-risk projects and taking a proper insurance policy. The financial manager must try to have proper coordination between the finance department and other departments of the firm to increase the efficiency and the productivity so that there is no wastage of fund.

Maintaining Proper Cash Flow:

The company must have a proper cash flow to pay the day-to-day expenses such as the purchase of raw materials, payment of wages and salaries, rent, electricity bills, etc. Good cash flow helps in getting cash discounts on purchases, large-scale purchasing, giving credit to customers, etc. Healthy cash flow improves the chances of survival and success of the company.

Credit Reserves:

The company must not distribute the full profit as a dividend to the shareholders. It must keep a part of its profit as reserves. Reserves are important because they can be utilized for future growth and expansion. It can be used as a financial cushion for contingencies in the future.

Create Goodwill:

Financial management must try to create goodwill for the company by improving the image and reputation of the firm. It helps the firm to survive in the short-term and succeed in the long-term. It also helps the company during bad times. It also helps in acquiring finance for future projects.

Next Topic: Profit and Wealth Maximization

Management > Financial Management > Introduction

The post Introduction to Financial Management appeared first on The Fact Factor.