The Evolution of Financial Management

• Early 1900 : instrument, institution, and procedures of capital market and money market
• Around 1920 : focus on security and banking sector, and investment in common stock
• Around 1930 : focus on liquidity, debt, regulation, bankruptcy, reorganization
• Early 1940 and 1950 : internal analysis, planning and controlling cash flow
• End of 1950 : capital budgeting, valuation, and dividend policy
• Around 1960 : development of portfolio theory
• Around 1970 : CAPM model and APT model that can be used to value the financial assets
• Around 1980 : focus on uncertainty, asymmetric information, financial signaling
• Around 1990 : multinational financial management, behavioral finance, enterprise risk management, good corporate governance