Financial Decisions, what should be your focus as an organization?
An organization has to be highly considerate about their finance in general, adequate and trusted hands have to be kept in charge of handling the company's finance in order to avoid run-downs and ruin. A company that has no appropriate and standard watch over its finance would go down the drain sooner than planned, so there is a strong call for smart attention to be placed in the area of finance.
When employing that section, it shouldn't be on the basis of attraction toward personality, it rather is based on skill, knowledge, and smartness.
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When an organization has a good financial report, it highly depends on how the different management decisions have been taken, as wise people say, a properly financially managed company will always create solid and confirm balanced sheets, it would also have account books that could be revisited on several occasions. Every company needs to take these financial management decisions seriously, as every action requires an appropriate timing for manifestation.
The first is a financial decision, which is the most basic type of financial management, when financial decisions are made in connection with raising funds, it would be easy and much more convenient to identify the various existing sources of income alongside the amount of money that can be raised through short and long term sources, which makes it a part of the process.
In the path of financial decision, financial management takes into consideration the evaluation of the capital cost and financial risks with different choices and then draws out a plan to help determine the percentage of money that would be obtained from the funds of shareholders. Long-term financing for a company can be done through two means; through shareholder cash or through borrowed capital.
An investment decision is the second most important financial management skill. Investment decisions are those financial decisions that are made by existing management to help with the allocation of funds into different assets, bearing in mind the major goal is to generate the potential for investors. What this entails is analyzing the possibilities of different potential investments and then picking out the one that has the most advantage, bear in mind that any investment decision made could either be a long-term or a short-term thing, and terms have to be stated appropriately.
Dividend decision which is another important financial management decision is made in relation to the shares of the company's earnings and how it would be distributed to shareholders through dividend payments.
While these three are the major ones, there are other financial management areas we need to pay attention to and I will be highlighting them in my next post, appreciate your time.