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Business Finance Reviewer

Financial management involves making investment, financing, and dividend decisions. It includes deciding which investments the business should make, how to raise finance from various resources, and how to distribute net profits between dividends for shareholders and retained profits. The objectives of financial management are to ensure regular funding for the business, adequate returns for shareholders, safety of investments, and a sound capital structure. Financial managers make financing and investment decisions to maximize shareholder wealth, while accountants focus on record keeping, reporting, and analysis of financial information.

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Rhystle Ann Balcita
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171 views1 page

Business Finance Reviewer

Financial management involves making investment, financing, and dividend decisions. It includes deciding which investments the business should make, how to raise finance from various resources, and how to distribute net profits between dividends for shareholders and retained profits. The objectives of financial management are to ensure regular funding for the business, adequate returns for shareholders, safety of investments, and a sound capital structure. Financial managers make financing and investment decisions to maximize shareholder wealth, while accountants focus on record keeping, reporting, and analysis of financial information.

Uploaded by

Rhystle Ann Balcita
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Business Finance Scope of Financial Management

1. Investment Decision: investment on


fixed assets (capital budgeting decision)
 The study of financing and investment and current assets (working capital
decisions made from theory to practice. decision)
 Making of decisions about which 2. Financial Decision: raising of finance
investment the business should make. from various resources
 Management of money an other 3. Dividend Decision: decision on net
valuable assets. profits distribution which are;
Role of Business Finance a. Dividend for shareholders
b. Retained profits
Financing – The act of bringing money
into the organization Objectives of Financial Management
Bus.Fin.- will help us in financing and 1. Ensures regular and adequate supply of
investment decision. funds
2. Ensures adequate returns of
Method of financing are: shareholders.
a. Taking on debt (mangutang) 3. Ensures safety of investments- to
b. Credit arrangements achieve adequate rate of returns.
(kasunduan) 4. Plan a sound capital structure- so that
c. Investments on real assets and balance between debt to equity capital
financial aassets will be maintained.
Business Finance and Accounting
Accountant- is concerned with financial record
keeping, production or periodic report,
statement and analysis.
Financial Manager- only makes decision
involving finance and not to provide financial
information.
Ps. In a small business, an accountant and
financial manager can be one person.
Financial Management
 It starts with a plan
 Having cash and resources is not
enough
 Financial management is a must
 Deals with decision that supposed to
maximize the value of shareholders’
wealth (shares of stocks)
 Planning, controlling, directing the
financial activities such as procurement
and utilizations of funds.
Stocks- forms of ownership in a corp

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