Objectives Financial Planning and Management

All business dealings involving money are termed financial activities of the company. Planning, organizing, controlling and directing the financial deals like arrangements and spending the money for the success of the company is known as financial management says Ilan Korchmar. It is possible by putting in the basics of management to the various financial transactions of the business.

Following are the various features of financial management:

The board members are required to make important investment decisions including investment in property also known as Capital Budgeting. The decisions taken regarding investment in current assets of the business are termed as working capital decisions.

Financial decisions: The important decisions regarding financial aspects of the business like identification of the right sources from where the money is arranged at a lesser cost for a definite period and how much that amount could earn for you.


Dividend Decision:- 

The decision of dividend from the net profit of the company is distributed among the shareholders of the public limited company and the rate of it is finalized by the financial manager of the company.

Retained profits: The net profit of the company is calculated after deducting the expenditure incurred on the expansion plans of the business.


Objective of financial management: The purchase, distributing the raw material to the different departments and money control is looked after the officials of financial management. It also ensure maximum utilization of funds at the minimum cost.

One of the main objective is to make sure that there is no paucity of funds to the company and the earning graph of the company is ever increasing and the shareholders of the company feel contented with the profitability of the company says Ilan Korchmar AXA.

Another focus should be the maximum utilization of funds available with the company and arrange them at lower cost.

Determination of capital composition:

Before investing your capital in any of the asset class, an estimate should be made of the capital to be deployed differently. This would include both short and long term investment in equities and debt market. The ratio of the cash owned by the company and the equity capital of the company largely forms its capital structure.

Choice of source of funds:

Additional finance required for the company could be arranged in several ways by either mortgaging shares and debentures with the bank or by encashing public bonds says Ilan Korchmar AXA. Each and every source from where the procurement of funds is to be made is by analysing the pros and cons and duration of financing and how much does it cost.

Investment of funds:


The financial manager of the Enterprise must have the expertise to invest the arranged funds in those areas which are profitable and the profits on investment are both regular and secured.

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