Lesson 3

Question 1

Financial Management Functions:

Answer 1

1. Financial planning and forecasting
2. Determination of capital structure
3. Investment of funds
4. Maintain proper liquidity
5. Disposal of surplus
6. Financial controls

Question 2

is a person who takes care of all the important financial functions of an organization. The person in charge should maintain a far sightedness in order to ensure that the funds are utilized in the most efficient manner

Answer 2

A financial manager

Question 3

Responsibilities of financial management

Answer 3

•Allocate funds to current and fixed assets
•​Obtain the best mix of financing alternatives
•​Develop an appropriate dividend policy within the context of the firm’s objectives.

Question 4

Daily activities of financial management:

Answer 4

•Credit management
•​Inventory control
•​Receipt and disbursement of fund

Question 5

is the system of rules, practices, and processes by which a firm is directed and controlled.

Answer 5

Corporate Governance

Question 6

are of primary importance in any practice of finance.

Answer 6

Ethics

Question 7

they are the monitors inside a public firm who are appointed to represent shareholders’ interest.

Answer 7

Board of directors

Question 8

examine the firm’s accounting systems and comment on whether financial statements fairly represent the firm’s financial position.

Answer 8

External auditors

Question 9

keep tract of the firm’s performance, conduct their own evaluations of the company’s business activities, and report to the investment community.

Answer 9

Analysts

Question 10

which help firms access capital markets, also monitor firm performance

Answer 10

Investment banks

Question 11

Credit analysts examine a firm’s financial strength for its debt holders.

Answer 11

Credit rating agencies