Functions of financial management

 Functions of Financial Management

Financial management is essential for properly and efficiently managing financial resources. Financial management functions ensure that the appropriate amount of funds is available when needed for a business. These functions range from the acquisition of funds to their proper and effective utilisation. So, here are various functions of Financial Management:

https://www.vedantu.com/commerce/functions-of-financial-management

1.Financing Decision: The amount of money to be raised from various long-term sources of funding, such as equity shares, preference shares, debentures, bank loans, etc., is the subject of this financial decision, referred to as a financing decision. In other words, it refers to the company's "capital structure." There are two ways from which finance can be sourced.

Borrowed Fund: It includes Retained Earnings, Bonus, and Share Capital.

Owner’s Fund: It includes Loans, Bonds, and Debentures.Investing Decision: Click here .

2.Investment decisions are those made in regard to how the company's funds are allocated among various assets. Long-term or short-term investment decisions are both possible. Capital budgeting decisions are long-term investment choices that involve large sums of money and are not reversible except at a high cost. 

3.Working capital decisions are short-term investment decisions that have an impact on how a business operates on a daily basis. It also includes choices regarding the quantities of cash, inventory, and receivables.Dividend Decision: 

4.Dividend decision is a term used to describe a financial choice regarding how much of a company's profit should be retained for future needs versus distributed to shareholders as a dividend.The portion of the profit that is distributed to shareholders is referred to as a dividend. 

The overall goal of maximising shareholder wealth should be considered when making the dividend decision

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