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Introduction
Business needs finance to meet their requirements in the economic world.
Any kind of business activity depends on finance. Hence, it is called as lifeblood of business organisation. Finance, in a real sense, is the cornerstone of the enterprise system good. It is vitally important to the economic health business firms, and hence to the nation and the world. All of this makes finance stimulating and exciting but also challenging and
sometimes confusing. Thus study of finance will helps for better understanding
of our financial system.
Finance is an art and science of managing money. It includes financial service and financial instruments. Finance is also referred as the provision of money at the time when it is needed.
B) 1) Definitions : Wheeler : Business finance is that business activity which concerns with the acquisition and conversation of capital funds in meeting financial needs and overall objectives of a business enterprise. 2) Bonneville and Deway : Business finance consists of the raising, providing, managing of all the money, capital or funds of any kind to be used in connection with the finance.
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Nature of Finance
Finance is concerned with cash as every business transaction involves cash directly or indirectly, finance is concerned with everything that takes place in the conduct of business.
4) Important Function of Business : Finance is an important function of any corporate, as money is required to purchase raw material, to pay wages and salary and so on. Proper planning is necessary, which may provide ways and means of ensuring that finance is readily available as and when need so arise. 6) Procurement and Utilisation of Funds :
Finance function is the task of procurement and utilisation of funds. It covers financial planning, forecasting of cash receipt and raising of funds, use and allocation of funds and financial control.
Another short-term objective of financial management may be proper accounting of receipts and payments of cash and payments in the form of cheques.
b) Wealth Maximisation : Wealth maximisation means maximising the net present value of a course of action. c) Regulation and Control : Regulation and control in respect of use of funds may be regarded as long-term objective of financial management d) Proper Estimation of Total Financial Requirements Proper estimation of total financial requirements is a very important objective of financial management. e) Proper Mobilisation of Funds : Mobilisation (collection) of finance is an important objective of financial management. f) Proper Utilisation of Finance : Proper utilisation of finance is an important objective of financial management.
Financial Control
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Dividend Policy : The decision as to which course should be followed depends largely on a significant element in the dividend decision, the dividend-payout ratio, that is, what proportion of net profits should be paid out to the shareholders. b) Retained Earnings : The second major aspect of the dividend decision is the factors determining dividend policy of a firm in practice
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Financial Analysis
Capital Budgeting
Financial Forecasting
Good Relations
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