Business finance and financial management, Finance Basics

Business Finance and Financial Management

Business finance is the process through which a financial manager or accountant gives finance for business use as and whenever it is required.  This provision has to be undertaken on the basis of the requirements of a company. On the other hand, Financial Management is a branch of economies concerned along with the generation and allocation of scarce resources to the most efficient consumer within the economy or as the firm.  The allocation of these resources is done with a market pricing system.  The firm needs resources in form of funds raised from investors.  The funds must be assigned within the organization to projects such will yield the highest return.

1. Requirements Consequent on the Operations of a Company as Basic Requirements

These have to be financed in so far as they arise out of the company's operations as salaries.

2. Shortages of Cash Brought About through Unforeseeable Circumstances E.G Non Payment via Debtors

These requirements have to be financed with short term finances e.g. overdrafts, however this may be against financial prudence rather such desires should be financed along with revolving finances in the circular flow. Although, the financial manager must manage his finances via such tools as:

  1. Cash budget - statement of expected receipts and payments over a projected duration of time - a forecast.
  2. Funds flow statement - (Actual).

Variance among actual funds flow along with cash budget. The variance must be arranged to remain the company liquid.

 

Posted Date: 1/29/2013 12:44:14 AM | Location : United States







Related Discussions:- Business finance and financial management, Assignment Help, Ask Question on Business finance and financial management, Get Answer, Expert's Help, Business finance and financial management Discussions

Write discussion on Business finance and financial management
Your posts are moderated
Related Questions
Ask quQUESTION 1 1. In the ratio test used to determine whether a qualified plan is nondiscriminatory, what is the minimum percentage of nonhighly compensated employees who must be

Significance of Investment Decisions a) Such type of decisions is importance since they will influence the company's size or like fixed assets, retained and sales earnings.

1. Each project has RM 10,000, and the cost of capital for each project is 12%. The projects' expected cash flows are as follows: Expected Net Cash Flows YEAR

I need report on Corporate Finance. Do you provide help in topic Corporate Finance? I need expert's assistance to solve my college assignment. Please suggest if it works for me.

Shareholders' wealth maximization - Objectives of Business Entity Shareholders' wealth maximization refers to maximization of the total present value of each decision made in

What is the effective annual cost of skipping the discount and paying at the end of the net period for the following credit terms: 6/10, net 70? please show work"

Cash and Marketable Securities Management The management of marketable and cash securities is single of the key areas of working capital management. Because cash and marketabl

Capital Market - Financial Markets These are markets for long term funds along with maturity time of more than one year. As like of financial instruments required here are deb

Restrictive Bond or Debt Covenant In this case the debenture holders will impose strict conditions and terms on the borrower. These restrictions may comprise: a) No disposal

What are the financial fluctuations? Financial Fluctuations: a. Financial market fluctuations can be a basis of macroeconomic instability. b. Are markets irrational? c