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FINANCIAL MANAGEMENT
ff. are the general rules to consider in the acquisition of funds.
The use of the funds should generate income which is greater than the cost of the funds.
the maturity of the obligation should be well within the earning life of the asset or project being financed.
projected regular capital requirements should be desired from long term investors or reliable sources which can ordinarily be depended upon for loan renewals or extensions , while short-term requirements should be covered through short-term borrowings from commercial banks or the money market.
This responsible for the liquidity, solvency profitability, and financial control of the business. This responsibility involves: financial planning , analysis of financial condition; and supervision of financial operations.
To perform these functions, the finance manager uses the following tools :
Cash budget to forecast short-run cash flows from operations and short-run working capital requirements.
Capital budget to forecast capital expenditures.
Operating statements to measure income, expenses, and profits.
Operations budget to forecast sales ,cost ,expenses and profits.
Operating margins to identify the components of gross sales and percentage of sales.
Balance sheet analysis(comparative , studies , ratios)
Comparative operating statements to compare results for the current period against those earlier periods and the company’s results against those of others in the same line of business.
3. Priority of claim or preference on assets.
4. Participation or voice in management.
the selection between the two would be based on the ff.
1.Period of the obligation agreement .
2. Priority of claim or preference on income.
Acquisition of Funds
personal equity
when a company retains portions of an employee's equity.
This is reported on the company's financial statement.
borrowed funds(fixed claims by outsiders.)
Financial planning works from the strategic and business plans to identify what financial resources are needed to obtain and develop the resources to achieve the goals in the two types of plans. Typically, financial planning results in very relevant and realistic budgets
The planning, directing, monitoring, organizing, and controlling of the monetary resources of an organization
DIRECTING AND MONITORING
PLANNING
ORGANIZING AND CONTROLLING
FINANCIAL MANAGEMENT
Based on Jim Harvey's speech structures