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Financial Management - Finance – An Introduction

Introduction of Financial Decisions

   Posted On :  19.06.2018 10:27 pm

Finance comprises of blend of knowledge of credit, securities, financial related legislations, financial instruments, financial markets and financial system.

Introduction
 
Finance comprises of blend of knowledge of credit, securities, financial related legislations, financial instruments, financial markets and financial system. As finance is a scarce resource, it must be systematically raised form the cheapest source of funds and must be judiciously utilized for the development and growth of the organization. Charles Gertenberg visualizes the significance of scientific arrangement of records with the help of which the inflow and outflow of funds can be efficiently managed, stocks and bonds can be efficiently marketed and the efficacy of the organization can be greatly improved.

The financial manager in his new role, is concerned with the efficient allocation of funds. The firm’s investment and financing decisions are continuous. The financial manager according to Ezra Solomon must find a rationale for answering the following three questions.

1. How large should an enterprise be and how fast should it grow?

2. In what form should it hold its assets?

3. How should the funds required be raised?

It is therefore clear from the above discussion that firms take different financial decisions continuously in the normal course of business. Liquidity, solvency, profitability and flexibility optimization goals and risk, would lead to reaping of wealth maximization goal.

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