AN INTRODUCTION TO BUSINESS FINANCE Flashcards
What are the broad functions of finance?
There are two broad functions of finance, one is controlling and the second is treasury.
What does finance deal with?
Finance deals with money acquisition, investment, funding, cost of goods production, loan, budgeting, payments etc.
What is the scope of finance?
The scope of the finance covers both financial services and financial management.
What are financial services dealing with?
Financial services are dealing with the designing of financial instruments and delivering of advice related purchase and sale.
What is financial management?
Whereas the branch of management sciences dealing with the planning, arranging, allocating, and controlling of financial resources is termed as “Financial Management”.
The basic objectives of “Financial Management” are to:
Ensure the supply of funds for the business’s operations.
Manage returns to shareholders
Make effective investment decisions.
Plan future money requirements for business operations.
Take measures to control the inflow and outflow of money.
What is the scope of financial management?
The scope of financial management broadly covers three important dimensions including finance, investment and asset management.
What are investment decisions in financial management?
it is one of the important dimensions of “financial management”
It starts with the investment required for the assets to be held by the business both fixed as well as current assets.
What are “capital budgeting” and “working capital” in financial management?
“Capital budgeting” is about decisions regarding fixed assets/Non-current assets and
“Working Capital” is about investment decisions about current assets.
What are financing decisions in financial management?
This dimension deals with “raising financial resources” for the business.
It is termed liabilities, common stocks, preferred stocks, etc.
“Dividend policy” is an important component of financing decisions it addresses the “dividend rate” to be paid to stockholders and “Retained Earning”.
What is Asset Managementin financial management?
Decision regarding assets acquisition, allocation and efficient use of fixed and current assets.
In the scope of financial management, What do financial analysts do?
It includes preparing financial plans, budgets, forecasting, financial comparison and accounting-related responsibilities.
In the scope of financial management, What does a project finance manager do?
This career opportunity deals with the arrangement of asset’s investment, consultation and coordination with investors and investment bankers and financial institutes.
In the scope of financial management, What does a capital expenditure manager do?
Mainly related to evaluation and recommendations for asset investment.
In the scope of financial management, What does a credit analyst do?
in this domain, a credit analyst has to evaluate, monitor and implement the credit policy.
In the scope of financial management, What does a cash manager do?
mainly dealing with the firm’s daily cash inflows and outflows.