The following explanation will help in understanding each finance function in detail
Investment Decision
One of the most important finance functions is to intelligently allocate capital to long term assets. This activity is also known as capital budgeting. It is important to allocate capital in those long term assets so as to get maximum yield in future. Following are the two aspects of investment decision
Since the future is uncertain therefore there are difficulties in calculation of expected return. Along with uncertainty comes the risk factor which has to be taken into consideration. This risk factor plays a very significant role in calculating the expected return of the prospective investment. Therefore while considering investment proposal it is important to take into consideration both expected return and the risk involved.
Investment decision not only involves allocating capital to long term assets but also involves decisions of using funds which are obtained by selling those assets which become less profitable and less productive. It wise decisions to decompose depreciated assets which are not adding value and utilize those funds in securing other beneficial assets. An opportunity cost of capital needs to be calculating while dissolving such assets. The correct cut off rate is calculated by using this opportunity cost of the required rate of return (RRR)
Financial Decision
Financial decision is yet another important function which a financial manger must perform. It is important to make wise decisions about when, where and how should a business acquire funds. Funds can be acquired through many ways and channels. Broadly speaking a correct ratio of an equity and debt has to be maintained. This mix of equity capital and debt is known as a firm's capital structure. A firm tends to benefit most when the market value of a company's share maximizes this not only is a sign of growth for the firm but also maximizes shareholders wealth. On the other hand the use of debt affects the risk and return of a shareholder. It is more risky though it may increase the return on equity funds. A sound financial structure is said to be one which aims at maximizing shareholders return with minimum risk. In such a scenario the market value of the firm will maximize and hence an optimum capital structure would be achieved. Other than equity and debt there are several other tools which are used in deciding a firm capital structure.
Dividend Decision
Earning profit or a positive return is a common aim of all the businesses. But the key function a financial manger performs in case of profitability is to decide whether to distribute all the profits to the shareholder or retain all the profits or distribute part of the profits to the shareholder and retain the other half in the business. It's the financial manager's responsibility to decide a optimum dividend policy which maximizes the market value of the firm. Hence an optimum dividend payout ratio is calculated. It is a common practice to pay regular dividends in case of profitability Another way is to issue bonus shares to existing shareholders.
Liquidity Decision
It is very important to maintain a liquidity position of a firm to avoid insolvency. Firm's profitability, liquidity and risk all are associated with the investment in current assets. In order to maintain a tradeoff between profitability and liquidity it is important to invest sufficient funds in current assets. But since current assets do not earn anything for business therefore a proper calculation must be done before investing in current assets. Current assets should properly be valued and disposed of from time to time once they become non profitable. Currents assets must be used in times of liquidity problems and times of insolvency.
Liquidity, Profitability,Stability,Growth
Donkey Unit
The four units the Finance Administration may staff are Procurement Units, Cost Units, Time Units, and Compensation/Claims Units. The are created based on need.
Bills you need to pay
In accounting there are four main areas. They are as follows corporate accounting, corporate finance, public accounting and investment banking.
To become a bank manager a person should have a Bachelor's degree in either accounting, business administration or finance. A Bachelor's degree takes four years to complete.
The passage of basic legislation by CongressActions taken by the PresidentKey decisions of the Supreme CourtThe activities of political ties; and custom
There are three standard styles of minutes: action, discussion, and verbatim. Each style has a specific use. Action minutes record the decisions reached and the actions to be taken, though not recording the discussion that went into making the decisions.
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We identify the four major decision responsibilities of operations management as process, quality, capacity, and inventory
The four essential positions in a business are: Operations Manager: This position oversees the day-to-day operations of the business, ensuring that everything runs smoothly and efficiently. They are responsible for managing resources, implementing policies and procedures, and ensuring that quality standards are met. Sales Manager: The sales manager is responsible for overseeing the sales team and developing strategies to increase revenue and profitability. They work closely with marketing and product development teams to identify market trends, develop new products, and create effective sales campaigns. Finance Manager: The finance manager oversees the financial aspects of the business, including budgeting, forecasting, and accounting. They ensure that financial statements are accurate and compliant with regulations, and develop strategies to improve profitability and financial stability. Human Resources Manager: The HR manager is responsible for managing the human resources of the business, including recruitment, training, and retention. They work to create a positive and productive work environment, and ensure that the business is compliant with labor laws and regulations. These four positions are critical to the success of any business, as they are responsible for managing key aspects of the business operations, including operations, sales, finance, and human resources.
Liquidity, Profitability,Stability,Growth
The four cases that explain the fulfillment of any manager goal regarding the profit.
General skills for becoming successfull manager
Donkey Unit
Donkey Unit
The four units the Finance Administration may staff are Procurement Units, Cost Units, Time Units, and Compensation/Claims Units. The are created based on need.