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1)Retained earnings:It is also known As: accumulated earnings, earnings surplus, unappropriated profit.

  Retained earnings are the portion of net income or net profit, taken from the income

statement, that are not paid out as dividends, These earnings are reinvested in the

company or used for some purpose by the company.  Retained earnings are used to improve the company through investment in research

and development, investment in plant and equipment, paying off debt, and other

programs.

  Retained earnings are cumulative. They represent past as well as present earnings of 

the firm that have been reinvested in the firm. The retained earnings account under the

Shareholder's Equity section of the balance sheet shows the retained earnings since

the inception of the company. Retained earnings are cumulative revenues from

undistributed profits.

2)Inventory control:

Inventory is essential to provide flexibility in operating a system. The inventory can be

classified into raw materials inventory, in-process inventory and finished goods inventory.

The cost of controlling these inventories is the cost of inventory control. This includes

  ABC analysis

  Fixing economical order quantity

  Lead time analysis

  Setting safety stock and reorder level

BASIC FINANCIAL DECISIONS:

The functions of raising funds , investing them in assets and distributing returns earned from

assets to shareholders are respectively known as known as financial decisions .Thus , finance

functions or decisions are divided into long term and short term decisions.

Long term financial decisions:

  Long-term asset-mix or investment decision

  Capital-mix or financing decision

  Profit allocation or dividend decision

Short term financial decisions:

  Short term asset mix or liquidity decision

Long term finance decisions:

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