There are three decisions that financial managers have to take:
- Investment Decision.
- Financing Decision and.
- Dividend Decision.
What are key decisions of financial management?
- Cash flow of the project.
- Rate of return.
- Investment criteria involved.
Why is financial management so important in business?
- Helps organisations in financial planning
- Assists organisations in the planning and acquisition of funds
- Helps organisations in effectively utilising and allocating the funds received or acquired
- Assists organisations in making critical financial decisions
- Helps in improving the profitability of organisations
What are the basics of financial management?
- growth and profitability ratios (e.g. gross margin by product)
- liquidity ratios (e.g. sales to working capital ratio)
- activity ratios (e.g. average accounts receivable days outstanding)
What is financial management and its functions?
- Decisions And Control. Financial managers shoulder the primary responsibility of making decisions and controlling the finances.
- Financial Planning. Decision-making also spills into planning financial activities and resources. ...
- Resource Allocation. ...
- Cash Flow Management. ...
- Disposal Of Surplus. ...
- Acquisitions And Mergers. ...
- Capital Budgeting. ...
There are four main financial decisions- Capital Budgeting or Long term Investment decision (Application of funds), Capital Structure or Financing decision (Procurement of funds), Dividend decision (Distribution of funds) and Working Capital Management Decision in order to accomplish goal of the firm viz., to maximize ...