MONEY MATTERS

Finance is the basic requirement of any business. A business requires fixed capital to acquire fixed assets like land and building, plant and machinery, furniture etc. It also needs working capital to buy raw materials, pay salaries and wages and to meet out all other routine expenses.
The sources of the fixed capital may vary with each concern. In the case of one- man business, partnership business or private company, the proprietor’s fund is the main source. In the case of public sector and Government companies, share capital is the source. Debenture capital or long –term loan from financial institutions are the other sources for fixed capital.
The sources of working capital are overdraft, cash credit, discounting of eligible bills and trade credit from creditors.
Financial management is concerned with the following important activities:
To find out the long-term and short –term financial needs of the business.
To identify and choose the right source for raising funds.
To ensure proper utilisation of funds.
To ensure safety of investments and also maximum returns on such investments.
To remain in the good book of the creditors, bankers and others by maintaining the creditworthiness of the business.
To ensure the shareholders a reasonable return on their holdings.

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