Question

Explain the functions of finance companies in 7 points .

Answer 1

Answer:

IMPORTANT FUNCTIONS OF THE FINANCIAL MANAGER:

The important function of the financial manager in a modern business consistsof the following:

1.Provision of capital: To establish and execute programmes for theprovision of capital required by the business.

2.Investor relations: to establish and maintain an adequate market for thecompany securities and to maintain adequate liaison with investmentbankers, financial analysis and share holders.

3.Short term financing: To maintain adequate sources for company’scurrent borrowing from commercial banks and other lending institutions.

4.Banking and Custody: To maintain banking arrangement, to receive, hascustody of accounts.

5.Credit and collections: to direct the granting of credit and the collectionof accounts due to the company including the supervision of requiredarrangements for financing sales such as time payment and leasingplans.

6.Investments: to achieve the company’s funds as required and toestablish and co-ordinate policies for investment in pension and othersimilar trusts.

7.Insurance: to provide insurance coverage as required.

Answer 2

Answer:

The seven functions or processes involved in managing the finance function are based on the acronym F.I.N.A.N.C.E. These are Financing, Investing, Negotiating and Deal Making, Administering, Numbers Generation, Cash and Treasury Management and Evaluating and Planning.