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                  34                                Corporate Finance                      BRILLIANT’S


                  Finance Functions or Functions of           \$m`ZoÝg Ho$ H$m`© AWdm \$m`ZopÝe`c _¡ZoO_oÝQ>/
                  Financial Management/Manager                _¡ZoOa Ho$ H$m`©
                      Finance  is  closely  concerned  with       \$m`ZoÝg H$m BÝQ>aàmBO Ho$ àmoS>ŠeZ, _mH}$qQ>J d
                  production, marketing and other functions of  AÝ` H$m`m] go K{Zð> gå~ÝY hmoVm h¡, Bg H$maU \$m`ZoÝg
                  the enterprise, so it is very difficult to separate  gå~ÝYr H$m`m] H$mo BZ H$m`m] go n¥WH$ H$aZm H${R>Z h¡Ÿ&
                  finance  functions  from  these                         \$m`ZoÝg H$m H$m`© úmoÌ _w»`V: \§$S> H$s
                  functions.  Mainly  the  field  of  Finance Functions   àm{ßV, CgH$mo AgoQ²>g _| BÝdoñQ> H$aZo
                  finance is concerned with raising  1. Investment Decision
                  of funds, its investment into assets  2. Finance Decision  Ed§ Cggo àmßV [aQ>Z© H$mo eo`ahmoëS>g© _|
                  and  distribute  return  to  the  3. Dividend Decision  {dV[aV H$aZo go gå~pÝYV h¡Ÿ& BZ H$m`m]
                  shareholders.  When      these  4. Liquidity Decision   H$mo H$aVo g_` H¡$e Ho$ BZâcmo VWm
                  functions are performed, it is also
                                                                          AmCQ>âcmo _| g§VwcZ ~Zm`o aIZm ^r
                  necessary that the outflow and inflow of cash
                  must be balanced. In this way, following are  Amdí`H$ h¡Ÿ& Bg àH$ma \$m`ZoÝg Ho$ _w»` H$m`© AWdm
                  the main finance functions or finance decisions:  \$m`ZoÝg {S>grOÝg {ZåZ{c{IV h¢:
                   1. Investment decision  or long-term  asset-  1. BÝdoñQ>_|Q> {S>grOÝg `m XrK©H$mcrZ gån{Îm`m| Ho$
                      mix decision.                               {_lU H$m {ZU©`Ÿ&
                   2. Finance decision or capital mix decision.  2. \$m`ZoÝg {S>grOÝg AWdm H¡${nQ>c {_Šg {S>grOÝgŸ&
                   3. Dividend  decision  or  profit  allocation  3. {S>{dS>oÝS> {S>grOÝg AWdm cm^ AbmoHo$eZ {S>grOÝg&
                      decision.
                   4. Liquidity decision or short-term asset mix  4. {cpŠd{S>Q>r {S>grOÝg AWdm em°Q>©-Q>_© AgoQ> {_Šg
                      decision.                                   {S>grOZŸ&
                      The finance manager has to manage funds     \$m`ZopÝe`c _¡ZoOa H$mo \§$S> H$mo Bg àH$ma _¡ZoO
                  in such a way so as to make their optimum   H$aZm hmoVm h¡ {H$ CgH$m AZwHy$bV_ Cn`moJ hmo gHo$ VWm
                  utilization  and  to  ensure  that  their  procur-  Cgo `h ^r gw{ZpíMV H$aZm hmoVm h¡ {H$ \§$S> H$s àmpßV Bg
                  ement is in a manner that the risk, cost and
                  control considerations are properly balanced  àH$ma hmo {H$ [añH$, H$m°ñQ> Ed§ H§$Q´>moc gå~ÝYr H$m`m] _|
                  under a given situation.                    g§VwbZ ahoŸ&
                      Here it is important to distinguish between  EH$ \$m`ZoÝg _¡ZoOa H$m H$m`© EH$ AH$mCÊQ>oÝQ> Ho$
                  the nature of job of the finance manager and  H$m`© go AcJ hmoVm h¡Ÿ& EH$ AH$mCÊQ>oÝQ> {~OZog Q´>m§OoŠeZ
                  that of an accountant. An accountant's job is  H$mo [aH$m°S>© H$aVm h¡ VWm \$m`Z|{e`b ñQ>oQ>_|Q> ~ZmH$a EH$
                  primarily to record the business transactions
                  and prepare financial statements which show  {ZpíMV Ad{Y Ho$ {bE {~OZog Ho$ n[aUm_m| H$mo àH$Q>
                  the  working  result  of  the  organisation  for  a  H$aVm h¡Ÿ& Xygar Amoa \$m`ZoÝg _¡ZoOa H$m H$m`© AH$mCÊQ>oÝQ>
                  given period. On the other hand, the finance
                  manager has a task entirely different from that  go EH$X_ {^Þ hmoVm h¡Ÿ& dh \§$S> Ho$ _¡ZoO_|Q> d AÝ`
                  of the accountant. He is required to manage  _hÎdnyU© H$m`m] Ho$ {c`o CÎmaXm`r hmoVm h¡Ÿ&
                  funds and perform other significant functions.
                      Finance functions do not necessarily occur  \$m`ZoÝg gå~ÝYr H$m`© h_oem EH$ H«$_ _| K{Q>V Zht
                  in sequence. They need planning and control of  hmoVoŸ& BÝh| \$_© H$s EpŠQ>{dQ>rO H$s ßcmqZJ Ed§ H§$Q´>moc H$s
                  firm's  activities.                         Amdí`H$Vm hmoVr h¡Ÿ&
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