Functions of Financial Management

Planning, organizing, directing and controlling the financial activities such as procurement and utilization of funds of the enterprise are called Financial Management.

Introduction:

Learn the Functions of Financial Management…

A finance manager is behind the estimation with regards to capital requirements of the company. 

1. Estimation of capital requirements: 

After the estimation has been ready, the capital structure must be determined.

2. Deciding of capital composition: 

A company has many choices like-

•Shares and debentures issues

•Loans are taken from banks and financial institutions

•Public deposits are drawn in form of bonds.

3. Choice of sources of funds:

Allocation of funds into profitable ventures is decided by the finance manager. Therefore safety is maintained on investment and standard return is made feasible.

4. Investment of funds: 

A finance manager makes the net profits decision. This is done in two ways:

•Bonus declaration

•Preserved profits 

5. Disposal of surplus:

Financial management is responsible for co ordinating diverse activities in the business. Thus, financial management plays the pivotal part in the success of any firm or organization.

Conclusion:

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