|
What is the scope of finance function?
The finance function is concerned with three types of decisions:
- Financing decisions are the decisions regarding the process of raising funds.
- Investment decisions are the decisions regarding the investment of funds.
- Dividend Policy decisions are strategic financial decisions and they are based on the profits earned by the organization. As the shareholders are the owners of the organization thus they are entitled to receive profits in the form of dividend.
What are the goals of finance function?
- Profit Maximisation
- Wealth Maximisation
What is the relation of finance function to other functions of a business enterprise?
A business enterprise has many functions apart from finance function such as production, marketing and personnel. All these functions are related to the finance function as they all require funds for their execution.
For example: In production function, to produce good quality of goods and proper functioning of various operations involved in the production function involves investment either in terms of fixed capital or working capital, which is a finance function. The personnel function deals with the availability of proper kinds of laborers at proper time, their training etc. All theses activities need funds. All the activities or functions are finally related to the finance function. The success of a business depends on the coordination between these functions.
|
