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This is assignment for Introduction to Business course given by Dr. Sachin Jeven at Graphic Era University. It includes: Managing, Financial, Resources, Planning, Obtaining, Objectives, Effective, Develop, Implement
Typology: Exercises
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Managing Financial Resources
Finance —business function of planning, obtaining, and managing a company’s funds in order to accomplish its objectives in the most effective possible way.
Finance manager —employee responsible for developing and implementing the firm’s financial plan and for determining the most appropriate sources and uses of funds.
Chief financial officer —top finance executive of a corporation; usually reports directly to the firm’s CEO. VP for Financial Management Treasurer Controller All address the risk-return trade-off
A. Organizations are placing greater emphasis on measuring and reducing the costs of conducting business as well as increasing revenues and profits.
B. Financial managers are executives responsible for developing and implementing their firm's financial plan and for determining the most appropriate sources and uses of funds.
C. The finance organization of a typical company consists of three levels, including: •at the top is the CEO -- Chief Executive Officer •second there is the CFO -- Chief Financial Officer •thirdly, there are three executives, who are commonly called the vice president for financial management, the treasurer, and controller.
The Financial Plan Document specifying the funds a firm will need for a period of time, the timing of inflows and outflows, and the most appropriate sources and uses of funds. What funds will the firm require during the appropriate period of operations? How will it obtain necessary funds? When will it need more funds?
Money —anything generally accepted as payment for goods and services.
Functions of Money
Why Organizations Need Money
A. Organizations require funds for many reasons, including: •to run day-to-day operations •to compensate employees and hire new ones •to pay for inventory •to make interest payments on loans •to pay dividends to shareholders •to purchase property, facilities, and equipment.
B. By comparing these needs with expenditures and expected cash receipts, financial managers determine precisely what additional funds they must obtain at any given time.
Sources of Funds
Debt capital -- represents funds obtained through borrowing
Equity capital
Short-Term Sources of Funds Short-term sources of funds are repaid within one year Major sources of short-term funds include: Trade credit Short-term loans