WHAT IS FINANCE AND FINANCIAL MANAGEMENT

• FINANCE


  always of great importance, be it in a business or in one's everyday life. It is important to manage risks in business, it is equally important to manage risks in life as well.
• FINANCE


  The science and art of managing money. (Gitman & Zutter, 2012)
• FINANCIAL MANAGEMENT


  deals with that decisions that are supposed to maximize the value of shareholder’s wealth (Cayanan). These decisions will ultimately affect the markets perception of the company and influence the share price.
• Since the managers of the company are making decisions for the interest of the board of directors and the board of directors do the same for the interest of the shareholders, it follows the goal of each individual in a corporate organization should have an objective of shareholders wealth maximization.
• The shareholders elect the Board of Directors (BOD). Each share held is equal to one voting right. their responsibility is to carry out the objectives of the shareholders. Otherwise, they would not be elected in that position.
• The board of directors is the highest policy making body in a corporation. The primary responsibility is to ensure that the corporation is operating to serve the best interest of the stockholders.
• The roles of a president in a corporation may vary from one company to another.
• VP for marketing: Formulating marketing strategies and plans. Directing and coordinating company sales, Performing market and competitor analysis, Analyzing and evaluating the effectiveness and cost of marketing methods applied, Conducting or directing research that will allow the company identify new marketing opportunities, e.g. variants of the existing products/services already offered in the market, and Promoting good relationships with customers and distributors. (Cayanan, 2015)
• VP for Production: Ensuring production meets customer demands, Identifying production technology/process that minimizes production cost and make the company cost competitive, and Coming up with a production plan that maximizes the utilization of the company’s production facilities.
• VP for Administration: The following are among the responsibilities: Coordinating the functions of administration, finance, and marketing departments, Assisting other departments in hiring employees, Providing assistance in payroll preparation, payment of vendors, and collection of receivables, Determining the location and the maximum amount of office space needed by the company and Identifying means, processes, or systems that will minimize the operating costs of the company. (Cayanan, 2015)
• What is the role of the VP for Finance?

  to determine the appropriate capital structure of the company
• CAPITAL STRUCTURE


  refers to how much of your total assets financed by debt and how much is financed by equity.
• To be able to acquire assets, our funds must have come somewhere. If it has bought using cash from our pockets, it has financed by equity.
• if we used money from our borrowings, the asset bought has financed by debt.
• FUNCTIONS OF FINANCIAL MANAGERS

  Financing decisions - include making decisions as to how to finance long-term investments and working capital-which deals with the day-to-day operations of the company.
• FUNCTIONS OF FINANCIAL MANAGERS

  Investing Decisions - To minimize the probability of failure, long-term investments have supported by a capital budgeting analysis.
• FUNCTIONS OF FINANCIAL MANAGERS

  Operating Decisions – deal with the daily operations of the company especially on how to finance working capital accounts such as accounts receivable and inventories.
• FUNCTIONS OF FINANCIAL MANAGERS

  Dividend Policies – is a part of profits that are available for distribution, to equity shareholders. The Finance manager must decide whether the firm should distribute all the profits or retain them or distribute a portion and retain the balance.