Purpose and Functions of Corporate Finance in an Industry
Financial management is considered in an organization and meant to make a plan, organize, direct and monitor the activities associated with it. It comprises of the funds required for the execution of the plan and to meet other general financial requirements. Examining various tools and applying them to attaining the desired output from the project.
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Capital budgeting is one of its forms considered, as a fixed asset. Whereas, the other investment decisions are considered as working capital. Relevant resources, total time of financing, kind of resource and the output of it, all are required to collaborate with financial decisions. Read below- mentioned points to understand the objectives and functions of the financial management in a company.
Financial Management Objectives
The financial management can be managed with the acquisition, issuance, and authority over the financial resources. It is considered for the continuation and equitable supply of the goods. The returns of the company entirely depend upon the expectations of the shareholders. And utilization of the funds for maximizing the profit. Safety equipment is also considered so that the expected rate of return can be received. It is also beneficial in balancing the debt and equity of the capital.
 Financial Management and Its Functions:
Estimation:Â All the expenses are calculated and the final result is formed to find the capital requirements of the company. Specific policies, costs, future costs, and various other things are measured for estimating the capital need of the company.
Determining the Distribution of Capital: After the estimation, a structure is formed to decide the short as well as long term goals and analyzing the debt-equity. Considering this, one can easily recognize the potential sources to collect the funds for the company.
Sources of Funds: Debentures and shares can be contemplated along with the approval of loans from the financial institutions and banks. Besides, one can also consider public deposits for performing other financial activities. Both the merits and demerits of all sources are considered. The time allocated for this is also examined.
Distribution of the surplus, scrap or obsolete: The net profits are examined by the finance manager in two ways. First, the dividend declaration and the other is retained profits, the former one comprises of recognizing the rate of dividends and other profits such as bonus. And the latter on rely on innovative ways to divide the plans effectively.
Management of Cash:cash is distributed in the form of payment of wages, salaries and meeting the expenses of other liabilities for maintaining the cost of the other stocks and purchase of the raw material. Both electronic and physical form of money is taken into consideration for covering all expenses.
Meeting financial Uncertainties: Â business not only meant to receive profits but also face several risks in continuing the purpose of business. Insurance policies can help one to manage the threats associated with the project.
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