Finance Function

The finance function refers to practices and activities directed towards managing business finances. It is oriented towards acquiring and managing financial resources to generate profit. The finance function contributes to the productivity of other business functions, planning, and decision-making activities. The four major types of financial decisions are investment, liquidity, financial, and dividend decisions. The investment decision function revolves around capital budgeting decisions, which involve the analysis of investment opportunities to determine their profit potential. The finance function ensures that there are enough funds at a reasonable cost, the safety of funds, efficient and profitable utilization of funds, and that finance funds don’t remain idle.


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