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Rss Directory > News > Economy & Business > Finance Check -


 
  Fri, 29 Sep 2006 13:42:43 +0200

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Budgetary control is the process of ascertaining several budgeted figures for the future of a business enterprise and then making comparison of these budgeted figures with the actual results for finding out discrepancies, if any. The comparison of budgeted and actual figures will allow the management to take curative actions at a proper time.

Budgetary control can be defined as, “A means of achieving the financial control of an entity whereby the actual results for a defined period of time are compared with the budgeted results, any differences (or variances) being noted, and some corrective action taken to bring the actual activities back into line with the budgeted ones if such variances need to be dealt with.”

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  Thu, 07 Sep 2006 08:38:14 +0200

Proper maintenance of finance is very essential for the success of a business enterprise. After starting a business firm, it is your duty to map and supervise its financial position. Budgeting is the most efficient tool, which keeps your business and its finances at right path.

A budget is a statement of expected results expressed in numerical terms. It is prepared in advance for the particular period to which it applies. It is an instrument of planning as well as control. It controls your finances for achieving present and future objectives.

Budgeting can be defined as, “Budgeting is the process of predicting and controlling the spending of money within the organization and consists of a periodic negotiation cycle to set budgets (usually annual) and the day-to-day monitoring of current budgets.”

A budget delineates your future spending and the way to finance that spending. Budget serves as a standard against which actual performance can be compared. It is prepared for definite period of time into the future and it expresses everything in precise numerical terms. Budgets elucidate programmes and determine the steps to be taken to achieve goal. The main features of a budget are as follows:

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  Thu, 07 Sep 2006 06:23:49 +0200

The term ‘fixed capital’ is often considered to be equivalent to fixed assets, which represents the employment of capital in permanent assets and other non-current assets. The fixed assets are assets of enduring nature that the business does not aim to dispose of, or that could not be discarded of without interfering the business actions. Thus a company holds the fixed assets with the intention of making profits directly or indirectly and not for the purpose of sale in the ordinary course of business. The fixed assets include land, building, plant, machinery, furniture, fixtures, vehicles etc.

Making investment in the fixed capital is the primary step for setting up a business enterprise. The investment in non-current assets is termed as ‘fixed capital.’ Such assets include items in which capital is locked for a long time. Although they do not show the investment in physical productive facilities, yet they are essential for the success of the business and regarded as vital part of the capital arrangement.

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  Fri, 01 Sep 2006 12:03:06 +0200

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Capital Budgeting is a process of making investment decisions in capital expenditures. It is an expenditure the benefits of which are likely to be received over a period of time exceeding one year. Capital Budgeting decisions are very important to every organization. Any fallacious investment decision may prove to be lethal for the survival of the business concern.

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  Fri, 01 Sep 2006 12:00:29 +0200

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The working capital is the life-blood and nerve centre of a business firm. The sufficiency of working capital assists in raising credit standing of a business because of better terms on goods bought, lesser cost of manufacturing due to the acceptance of cash discounts, favorable rates of interest etc.

No business can run effectively without a sufficient quantity of working capital. It is crucial to retain right level of working capital. Finance manager is required to decide the amount of accurate working capital.

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  Fri, 01 Sep 2006 11:58:34 +0200

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The internal financing is a technique under which all profits of a company are not distributed amongst the shareholders as dividend, but a part of the profit is re-invested in the company. This process of retaining profits year after year and their utilization in the business is also known as ‘ploughing back of profits.’

These retained earnings are used in future for funding innovation and growth programmes and for fulfilling the fixed or working capital needs of the company. Since it means dependence on inner resources to meet up the fiscal requirements of the company.

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  Fri, 01 Sep 2006 11:53:13 +0200

Financial plan is a statement estimating the amount of capital and determining its composition. The quantum of funds needed, will depend upon the assets requirements of the business. The time at which funds will be needed should be carefully decided so that finances are raised at a time when these are needed.

The next aspect of a financial plan is to determine the pattern of financing. There are a number of ways for raising funds. The selection of various securities should be done carefully. The funds may be raised by issuing of capital and debentures, raising of loans etc. Once a pattern of financing is selected then it becomes very difficult to modify it. A financial plan also spells out the policies to be pursued for the floatation of various corporate securities, particularly regarding the time of their floatation.

A financial plan should be carefully determined. It has long-term impact on the working of the enterprise. It should ensure sufficient funds for genuine needs. Neither the plans should suffer due to shortage of funds nor there should be wasteful use of them. The funds should be put to their optimum use. The main objectives of financial plan are as follows:

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  Fri, 01 Sep 2006 11:49:04 +0200

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A full service trading firm offering commodity and online futures to clients worldwide.
Financial Management is one of the crucial functional areas of management, because the success of a company wholly depends on the proper use of its financial resources. The significance of financial management cannot be overstressed. Sound financial management is necessary in all organizations whether big, small or medium.

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  Fri, 01 Sep 2006 11:45:14 +0200

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Finance is universally considered as the life & soul of business, trade, commerce and industry.

Finance is highly cardinal part of a business, essential for a business organization, and very vital for execution of business plans.

The activities of employees, workers, officers, traders and industrialists are moulded by the financial factors. Maintaining a proper amount of finance is a key to success. The better a company manages its finance structure, the less the company needs to borrow.

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  Fri, 01 Sep 2006 06:43:33 +0200

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