How did the history of financial derivatives develop? Describe how we use financial derivatives today, and how that purpose has evolved.
- How did the history of financial derivatives develop? Describe how we use financial derivatives today, and how that purpose has evolved.
Financial management is defined as the process where the finance manager plans, organizes, directs and controls all the financial undertakings in the organization. Few principles which come under the general management are applied to the funds that are utilized in the company. Functions of financial management are as follows; 1) Estimate capital requirements- This is carried out by the finance manager by keeping in mind the expected costs, profits, future programs , policies etc. 2) Determine capital composition- This process comes after the estimation of capital has been made. A proper capital structure needs to be decided for equity analysis in the short and long term. 3) Source of fund- The company needs to decide how the additional funds for the company is sourced. Sources include issue of shares & debentures, borrowing from banks or other financial institutions as loans, by issuing bonds etc. 4) Investment of funds- The finance manager takes important decisions as to how the fund needs to be allocated in order to make the company profitable. 5) Dividing net profits into retained profits and dividend declaration. 6) Finance manager manages the cash and controls the carries out financial control.
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