Retained earnings i.e. maintaining residual profits to fulfill future contingencies can be a key perform together with the dividend perform. After the procurement of funds from numerous sources in required quantities, the subsequent perform of the finance executives is the allocation of those funds on worthwhile tasks. In the short run, the chance factor could be uncared for, but within the long-time period, the entity can not ignore the uncertainty. Shareholders are investing their cash in the firm with the hope of getting good returns and in the event that they see that nothing is completed to extend their wealth. It is the versatile aim of the company and a highly beneficial criterion for evaluating the efficiency of a enterprise organisation.
Long-term funding determination is the most crucial monetary decision of an enterprise because the expansion, productiveness and success of the agency in the long run depend upon such selections. Such selections are related to the choice of an asset or project or plan of action or proposal whose benefits are prone to be obtainable sooner or later. It keeps business operations going with the proper administration of cash, accounts receivables and stock. It is another necessary decision where a business concern has to take maximum care in financing completely different proposals. The acceptable mixture of finance with debt to equity- immediately contributes to the profitability of a business unit. The instrument that is to be selected should goal at maximising the returns to the investors and to protect the interest of collectors. The finance manager has not only to plan, procure and utilize the funds but he additionally has to train control over finances.
His high-most accountability is to ensure the provision of sufficient funds from time to time within the means of business operations. Therefore, the new position of the finance supervisor calls for in-depth evaluation of the above components and execution of the same in day-to-day administration of the finance department.
This will allow him to ensure that funds are being utilized as per the plan. Financial management is the most important functional area of management. All different practical areas such as production administration, advertising administration, personnel administration, and so forth. depend upon financial management. Promotional bills embody expenditure incurred within the strategy of firm formation. Fixed capital needs depend on the character of the business enterprise-whether it’s a manufacturing, non-manufacturing or merchandising enterprise. This strategy has been criticized by the modern students on numerous grounds and so they have given the fashionable strategy to financial management. Also, a balance between debt and equity must be maintained while financing in order that an sufficient return on equity is-generated with minimal danger concerned.
He should develop the angle of research and innovations to discharge his duties competitively. This has compelled the management to offer a private Library and database to make rational decisions. To conclude, the finance supervisor of a company should be extra vibrant, dynamic and should have a continuous learning perspective. He ought to have easy access to Books, Magazines, Journals, Periodicals, Newspapers and the Media for updating his knowledge. To attain this particular goal, he has to use the technique of leverages which guides the organisation to have optimal capital structure.