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(Chapter- 1) Part-llBusiness financeMeaning:-Every enterprise, whether big, medium or small, needs finance to carry on its operation and achieve its targets. Without adequate finance m no enterprise can possibly accomplish its objectives. Finance refers to the management of flow of money in an organization. Business finance is referred to an activity or a process which is concerned with acquisition of funds, use of funds and distribution of profit by a business firm.It refers to that part of the management activity which is concerned with efficient planning and controlling of financial affairs of the enterprise.According to Massie Financial management is the operational activity of a business that is responsible for obtaining and effectively utilizing the finds necessary for efficient operations.Scope of financial management:- Financial decisionInvestment in fixed assets Dividend payment policy Capital structure decision Investment in current assetsretaining of surplus fundsFinancial decision: - it refers to the determination as to how the total funds required by the business will be obtained from various ling-term sources. Long-term financial sources capital, retained earning, preference share capital, debenture, long-term loan, etc.Factor affecting financial decision:-1) Cost: - the cost of all the source of finance is different. The rate of interest on dept, fixed rate of the expectations of the shareholders of the equity happen

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