According to Paul G. Hasings, “finance” is the management of the monetary affairs of a company.
Functions of Finance
According to Paul G. Hasings, “finance”
is the management of the monetary affairs of a company. It includes determining
what has to be paid for and when, raising the money on the best terms
available, and devoting the available funds to the best uses. Kenneth Midgley
and Ronald Burns state: “Financing is the process of organising the flow of
funds so that a business can carry out its objectives in the most efficient
manner and meet its obligations as they fall due.”
Finance squeezes the most out of
every available rupee. To get the best out of the available funds is the major
task of finance, and the finance manager performs this task most effectively if
he is to be successful. In the words of Mr.A.L.Kingshott, “Finance is the
common denominator for a vast range of corporate objectives, and the major part
of any corporate plan must be expressed in financial terms.”
The description of finance may be
applied to money management provided that the following three objectives are
Many activities associated with
finance such as saving, payment of things, giving or getting credit; do not
necessarily require the use of money.
In the first place, the conduct
of international trade has been facilitated. The development of the pecuniary unit
in the various commercial nations has given rise to an international
denominator of values. The pecuniary unit makes possible a fairly accurate
directing of capital to those parts of the world where it will be most
productive. Within any given country, the flow of capital from
one region to another is guided in a similar manner.
term ‘finance’ refers to the financial system in a rudimentary or traditional
economy, that is, an economy in which the per capita output is low and
declining over a period of time. The financial organisation in rudimentary
finance is characterized by the absence of any financial instruments of the
saving deficit units of their own which they can issue and attract savings.
There will not be any inducement for higher savings by offering different kinds
of financial assets to suit the varied interests and preferences of the
investing public. The other characteristic of such a financial system is that
there are no markets where firms can compete for private savings.
Tags : Financial Management - Finance – An Introduction
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