FINANCIAL MANAGEMENT - MEANING, OBJECTIVES AND FUNCTIONS EXAM QUESTIONS AND ANSWERS 100% ACCURATE!

Financial decisions - They relate to the raising of finance from various resources which will depend upon decision on type of source, period of financing, cost of financing and the returns thereby. Dividend decision - The finance manager has to take decision with regards to the net profit distribution. Net profits are generally divided into two: Dividend for shareholders- Dividend and the rate of it has to be decided. Retained profits- Amount of retained profits has to be finalized which will depend upon expansion and diversification plans of the enterprise. Objectives of Financial Management - ANSWER The financial management is generally concerned with procurement, allocation and control of financial resources of a concern. The objectives can be- 1.To ensure regular and adequate supply of funds to the concern. 2.To ensure adequate returns to the shareholders which will depend upon the earning capacity, market price of the share, expectations of the shareholders. 3.To ensure optimum funds utilization. Once the funds are procured, they should be utilized in maximum possible way at least cost. 4.To ensure safety on investment, i.e, funds should be invested in safe ventures so that adequate rate of return can be achieved.