Finance

Question 1

Describe the duties of financial management.

Answer 1

Financial planning: process of managing an individual’s or organization’s financial resources to achieve specific goals and ensure long-term financial stability.

Management of financial risks:involves identifying, assessing, and mitigating potential risks that could negatively impact an organization’s financial health

Record-keeping: systematic process of recording, organizing, and maintaining financial transactions and data. It is essential for tracking financial activities, ensuring accuracy, and supporting decision-making.

Financial reporting: process of preparing and presenting financial statements and other reports that provide an overview of an organization’s financial performance and position. It is essential for stakeholders to make informed decisions.

Question 2

What are the three pillars of financial management?

Answer 2

• Investment decision
• Financing decision
• Dividend decision

Question 3

What are three common areas covered in the statement of the financial position.
Substantiate your response with examples

Answer 3

Assets: resources owned by the organization that provide future economic benefits. Items expected to be converted into cash or used up within one year, such as cash, accounts receivable, and inventory.

Liabilities: Obligations that the organization owes to external parties. Debts and obligations that are due within one year, such as accounts payable and short-term loans.

Equity: The residual interest in the assets of the organization after deducting liabilities. Funds invested by the owners or shareholders.