Five principles of finance that have significant impact on decision making of managers are :

1. Time value of money - Money received earlier is worth more than money received later. This is because holding money idle has an opportunity cost. If money is received earlier, it could be invested to earn a return. Hence, money received earlier is more valuable than money received later.
2. Risk and return - Higher return is required for higher risk. Conversely, lower risk requires lower returns. This is because investors who bear higher risk required higher returns to compensate them for the higher risk borne by them.
3. Cash flows are more important than earnings - Cash flows are the actual funds generated by the firm, and available for distributing to investors or reinvesting in the business. Earnings are merely book figures, and do not represent the actual funds generated by the firm. Therefore, cash flows are more important than book earnings.
4. Markets are right - Generally, markets mostly price securities efficiently. Markets prices are determined by supply and demand, and the fair value of securities are generally close to their market prices.
5. Conflict of interest - Shareholders and managers have different incentives and objectives, and hence their interest conflict. These are known as agency problems. These agency problems are an important consideration in management, and mitigating these problems is important for shareholders