Whenever you are running a business or any organisation the most important thing is finance. it requires a lot of concentration to manage and deal with financial issues so there are some decisions concluded by them we can easily know about what and how to manage fiancee at a working place as well as non working area:
- The Financial Management studies empowers the managers to deal with three types of decisions
- The firm needs various types of assets for the smooth business operations.
- These assets are divided into two categories
Fixed Assets & Current Assets
- Financial management studies differentiate between the capital budgeting and working capital decisions because
- The investment in fixed assets are very high as compared to the working capital, and
- The investment in fixed assets effects the long term profitability of the business.
- It deals with the financial pattern of the firm, which decides the sources and amount of funds, a firm is willing to raise.
- There are two major sources of raising funds i.e., shareholders funds and borrowed funds.
- Shareholders funds parts the ownership while borrowed funds has fixed interest commitment.
- As a firm operates, it earns profits at the end of financial year.
- The shareholders expects a good return in the form of dividend.
- The management, at the same time, wants the profits to retained in the business for future projects.
- How much of the profits to be retained and how much to be distributed as dividend is known as dividend decision, which form a part of FM study.
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