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The3 main decisions which every finance manager has to take are as follows:
1. Investment decision
This decision relates to careful selection of Fixed and Current Assets in which funds will be invested by the firm. A firm has to select the most appropriate investment which will bring maximum benefit for the firm and deciding or selecting most appropriate proposal is investment decision.
The Finance Manager has to decide how to invest the company's money, taking the risk, return and liquidity aspects into consideration.
2. Financing decision
The second important decision which finance manager has to take is deciding source of finance. Deciding how much to raise from which source is concern of financing decision.
The FM should oversee the capital structure of the company, determining the best mix of debt, equity and internal financing.
3. Dividend decision
This decision is concerned with distribution of surplus funds. The FM has to decide how much surplus profit is to be distributed to equity shareholders in the form of dividend or kept aside in the form of retained earnings based on the growth plans and investment opportunities.
If you look at the balance sheet of a company , you can recognize the3 important decisions you have to take as a finance manager as follows;
1- Asset (current and Long term , means how much and what types of your investments you have to select and how much each..
2- Liabilities , which means how to fund theses investments you have selected from step no1 .. and what should be funded from current liabilities and what from Long-term liabilities.
3- The number/figure of the Owners` Equity .. How much dividends, how much to reserve..every year,
Thank you
I agree with Mr. BASKAR Answers
Thank you for the invitation. I think the three main decisions within the ambit of finance are:-
1. Strategic planning decisions including those covering business type, product mix , growth rate, pricing decisions,
2. Capital structure decisions encompassing financing decisions etc,
3. Budgeting and short range planning decisions including cash flow , credit policies etc.
