W1 Flashcards
art and science that describes the MANAGEMENT, CREAT & STUDY of MONEY, banking, credit, investments, assests & liabilities.
BUSINESS FINANCE (FINANCE)
Objectives of Financial Management
Profit Maximization
Wealth Maximization
MAIN AIM of any kind of economic activity is to earn profit
PROFIT MAXIMIZATION
FINANCIAL BENEFIT that is REALIZED when the amount of revenue gained is EXCEEDS the expenses, costs and taxes
PROFIT
MODERN CONCEPT which deals with the increase of the VALUE of a business inorder to increase the share of the owner or stockholders
Wealth Maximization
Key Individuals in Business
Financial Manager
Controller
Treasurer
he is in charge of the OVERALL FINANCE functions of a business DEVELOPS STRATEGIES to achieve the FINANCIAL goal of the company
Financial Manager
is the one who responsible for managing the ACCOUNTING STAFF that provides managerial accounting info
Controller
his primary duty include ASSET SAFEKEEPING & CASH MANAGEMENT. Also responsible for OBTAINING investment capital, loans & credit from outside sources
TREASURER
Functions of FINANCIAL MANAGER
Forecasting financial requirements
Acquiring Necessary Capital
Investment Decision
Cash Management
Interrelation w other department
Financial Manager is responsible to ESTIMATE the financial REQUIREMENT of business
Forecasting financial requirements
Also incharge of the ACQUISITION of the necessary capital to be used in the business
Acquiring Necessary Capital
must carefully select BEST INVESTMENT alternatives
Investment Decision
must see that the ENTITY has ENOUGH CASH for it’s business operations
CASH MANAGEMENT
must maintain GOOD RELATIONSHIP w all functional DEPARTMENT of the business Organization
Interrelation w other department
