Finance Function
Nature of Finance Function
Finance functions are related to overall management of an enterprise .
Finance functions are related to other functions of management such as production,
marketing and personnel.
Finance functions are necessary for all type of business organizations.
Finance functions are important for the survival and growth of a firm.
Finance functions are influenced both by external needs and management
considerations.
Finance functions have to be organised differently in different organizations.
Objectives of Finance Function
To acquire adequate funds: The main aim of finance function is to arrange adequate
funds for the business at the time the firm needs . The funds must be sufficient to carry
out the objectives of business in the most efficient manner and meet its organizations as
they fall due.
To ensure proper utilisation of funds: Another objective of finance function is to
efficiently utilise the funds arranged. Funds are scarce. They are costly. Hence all efforts
must be made to avoid their wastage.
To increase Profitability: Another objective of finance function is to increase
profitability of business . We know that money makes money. This means that to
increase profitability, sufficient funds will have to be invested.
To maximise firm’s value: This is the important objective of finance function in the modern
times. Whenever funds are raised or utilised ,the most important points to be kept in view is to
maximise the value of firm.
Nature of Finance Function
Finance functions are related to overall management of an enterprise .
Finance functions are related to other functions of management such as production,
marketing and personnel.
Finance functions are necessary for all type of business organizations.
Finance functions are important for the survival and growth of a firm.
Finance functions are influenced both by external needs and management
considerations.
Finance functions have to be organised differently in different organizations.
Objectives of Finance Function
To acquire adequate funds: The main aim of finance function is to arrange adequate
funds for the business at the time the firm needs . The funds must be sufficient to carry
out the objectives of business in the most efficient manner and meet its organizations as
they fall due.
To ensure proper utilisation of funds: Another objective of finance function is to
efficiently utilise the funds arranged. Funds are scarce. They are costly. Hence all efforts
must be made to avoid their wastage.
To increase Profitability: Another objective of finance function is to increase
profitability of business . We know that money makes money. This means that to
increase profitability, sufficient funds will have to be invested.
To maximise firm’s value: This is the important objective of finance function in the modern
times. Whenever funds are raised or utilised ,the most important points to be kept in view is to
maximise the value of firm.
