Planning Environment in Financial Management

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Involves

  1. Analyzing the Financial flows of a company
  2. Fore costing consequences of various investment
  3. Financial and divided Decision
  4. weighting (measure) the effects of various alternatives
  5. The aim of financial planning should full fill the needs of company

Functions of Financial Management

  1. Determine the Financial needs

  2. Determining sources f funds

  3. Financial Analysis– The financial management is required to measure its liquidity, determine its profitability and assets overall performances in financial term.

  4. Optimal capital structure– The Finance Manger has to establish on optimum capital structure and ensure the maximum rate of return on investment.

  5. Cost volume Profit analysis– The finance Manger has to ensure that the income of firm should cover its variable cost and fixed cost. The Finance manger has to find out BEF     

  6. Profit planning & Control – It is a Dual Function Which enables management to determine as cost it has incurred and revenue it has earned during a particular period

  7. Fixed Assets management– Finance manager has to essence that these assets should give the reasonable return of the investment

  8. Capital budgeting

  9. Working capital management

  10. Divided Policies

Sources of Finance

Business firms need finance mainly for two purposes

  1. To fund the long term decisions
  2. To meet the working Capital Requirement

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