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Identify three strategic decisions made by financial management?
Wiki User
∙ 14y ago
Managing finance well is the key to any organization to produce results and profitability. There are various rules that one needs to employ in order achieve this objective.
1. Capital budgeting . A detailed budget and a profit and loss statement are the prerequisites for any organization -- a budget at the grass root level tells the Organisation their financial requirements for the coming year or for the next 5 years.
Allocating funds is the key to efficient management of funds as allocating excess to one and providing less funds to another activity is sure to topple the apple cart. One tends to overlook the hidden costs which a good budget is able to highlight. It is these hidden costs one overlooks and can result in tremendous pressure on the financial resources available to a company. Forecasting the cost involved in running the company in a detailed manner and then getting a picture of actual expenditure is essential to improve the financial management of an organization.
2. Capital structure . An efficient system to collect out standings as several organizations give credit to their customers
who have a tendency to delay payments.
3. Working capital management . Where a company gets into trouble is when there is no working capital a keen eye needs to be kept on this vital area without which a company can collapse . One needs to look at any funding options that the company can rely on .
So the strategic decisions made by financial management are
- Capital budgeting
- Capital structure
- Working capital management
Wiki User
∙ 14y ago
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