Finance Functions
The following explanation will help in understanding each finance function in detail are below:
- Investment Decision
- Financial Decision
- Dividend Decision
- Liquidity Decision
Investment Decision
Financial Decision
Dividend Decision
Profit or a positive return on investment is a common goal for all businesses. However, in the event of profitability, the essential duty of a financial manager is to choose whether to distribute all earnings to shareholders, retain all profits, or give part of the profits to shareholders while keeping the other half in the organization.
It is the role of the finance manager to determine an optimal dividend policy that optimizes the firm's market value. As a result, an optimal dividend payment ratio is determined. In the event of profitability, it is usual practice to distribute recurring dividends. Another option is to give current shareholders bonus shares.