Question

Write a note on the functions of financial administration in public enterprises

Answer 1

The methods and instruments of raising finance. It presents the conventional view of financial administration in PEs. Today, financial administration goes far beyond the task of raising finance and deciding about the mix of financial instruments. According to another view, financial administration in PEs deals with the management of cash. This definition implies that all such activities which affect the cash flow in PEs can be considered as financial administration. This is a very broad definition of financial administration as there cannot be many activities which do not influence the cash flow in PEs and as such it lacks operational validity. Some experts conceptualize financial administration in PEs as that group of activities which deal with raising of finance, its allocation among different purposes and monitoring their financial performance. This definition possesses conceptual clarity and also combines operational validity.