IBS on Financial Report: Functions of Finance Management and Sources of Finance

IBS on Financial
Report

Contents
INTRODUCTION ..........................................................................................................................1
MAIN BODY...................................................................................................................................1
1.What is finance and finance management................................................................................1
2.Functions of a finance management.........................................................................................1
3.Explain the different sources of finance. .................................................................................2
CONCLUSION ...............................................................................................................................4
REFERENCES................................................................................................................................4

INTRODUCTION
Finance is referred as the study of money, currency and subject of capital asset utilisation
in the business. Financial management whereas refers to the management of finance in an
organisation for utilising and maximising the wealth of shareholders and investors (Delfani and
Ibrahim, 2021). In this report, the concept of finance and financial management are explained
and differentiated. This report puts a higher focus on the functions relating to the management
of finance in an organisation. The sources of finances that are available with the business have
also been taken into account and justified with suitable explanations.
MAIN BODY
1.What is finance and finance management.
Finance: Finance as a subject is defined to be the study of money, banking, investments,
assets. Finance involves the activities undertaken by an enterprise to bring in capital with sale of
stocks, bonds, or other promissory notes. It is the discipline of currency, leverage, debt and the
utilisation of capital assets of any organization. It is also related with the process of acquiring
funds and represents the utilisation and creation of money management.
Finance management: It is defined to be those activities which are performed with the
objective of improving and maximising the shareholders wealth in an organisation while also
utilising the principles of time value of money, diversification and the investment generations. It
involves application of management principles to the financial resources to increase the worth of
business assets.
2.Functions of a finance management.
Financial management plays a very crucial role in an organisation. It deals with the procurement
and effective utilisation of the resources in an organisation. An effective financial management
enables an organisation to aim for profit maximisation and sound financial health for the
business. The functions in financial management are as follows:
 Financial planning and forecasting: Financial management assists an organisation in
preparing for its future plans regarding the business finances termed as financial panning.
This is done by the finance managers of the organisation taking various factors in
consideration (Fauzi, Hasim and Mustafa, 2018). These planning are based on various
forecasts that the business does to prepare for an effective set of plans. These are based
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