An important sector of business

An important sector of business

Accounts and Finance are the very important sectors for any organizations. Managing the financial condition is a great task for every company to predict the profits. Finance management is the main work for a company because when we miss out to manage it carefully, we will end up with great losses and so reaching the goals will become a very complicated one. We can also learn about the financial sector in detail by just clicking Crypto Code.

Financial management:

There are many definitions of financial management given by the different businessmen and the researchers. But the meaning remains the same. That is the financial management is just a way to manage the number of sand funds in an organization and the financial managers are the ones responsible for managing it.

Scope:

The finance sector has many scopes and it is classified into four categories.

  1. Investment decision:

It involves risk evaluation, measuring the cost of capital and estimating the expected benefits of a project. There are two components to the investment decision.

  • Capital budgeting
  • Liquidity
  1. Financing decision:

Financing decision is concerned with the amount of fund and the structure of finance of the organization. A firm can raise their funds from various sources when they want to meet the needs of investors.

  1. Dividend decision:

A dividend policy should be made when the firm wants to achieve or maximize the wealth. The finance manager should think about the opportunities for investment for the firm and the plan for expansion.

  1. Working capital decision:

It is related to the investment in current assets and current liabilities. Current assets are cash, receivables, short-term securities and current liabilities consist of creditors, bank overdraft etc.…, Current assets can be convertible into cash in a year. Current liabilities will mature for payment in an accounting year.

Objectives of financial management:

The objectives of financial management are listed below.

  • To ensure that there is a regular and adequate supply of funds to the organization.
  • The main objective is about the profit maximization. The maximized profit can be yield only when the marginal cost is equal to marginal revenue.

Conclusion:

Thus concluding that the finance department is the major sector for any business and we need to have all the finance related documents confidentially because the financial condition of the organization should be kept in a secret manner. The profits will make the organization to grow better and withstand in the business market. So, the employees should give their best to grow up the company.