working of financial system

May 28th, 2015
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Abilene Christian University
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Primary responsibility of a finance manager is to raise necessary funds to meet operating requirements of the business Criticisms Narrow approach Over emphasized on non recurring problems Concentrated attention to problems of corporation finance Laid more stress on problems of long term financing

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FINANCE FUNCTIONSTraditional Concept Of Finance FunctionPrimary responsibility of a finance manager isto raise necessary funds to meet operatingrequirements of the businessCriticismsi.Narrow approachii. Over emphasized on non recurring problemsiii. Concentrated attention to problems ofcorporation financeiv. Laid more stress on problems of long termfinancingMODERN CONCEPT OF FINANCECONCEPTProcurement of funds as well as application offundsFinance manager is concerned withi.ii.All financial activities like planning, raising,allocating and controlling funds andProblems of incorporation, liquidation,consolidation, re organisation.NON RECURRING FINANCE FUNCTIONRECURRINGPLANNINGFINANCEFOR FUNDSFUNCTIONi.Planning for fundsTask of finance manager in a new or goingconcern is to formulate financial plan for thefirmHe has to aim at synchronizing the cashinflows and cash outflowsTwo methods of estimating fundsrequirementsi.ii.Balance sheet methodCash budget methodii. Raising of fundsProcurement of capitali. Security Issues orii. Borrow money from financial institutionsiii. Allocation of FundsIn allocating the funds consideration must begiven to the factors such as Competing use,immediate requirements, managements ofassets etcWhile managing cash the finance managershould profitability and liquidity of thecorporationManaging fixed assets, inventoriesiv. Allocation of Inc

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