8 Functions of Financial Management

Name of the candidate: RUSTAMOV OTABEK

Subject: Financial management
Cohort: COHORT-3

Assignment of Financial management

1.What are functions of financial management
8 Functions of Financial Management

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  Financial Planning and Forecasting. ...
  
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  Cash Management. ...
  
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  Estimating Capital Expenses. ...
  
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  Determining Capital Structure. ...
  
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  Choosing Sources of Funds. ...
  
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  Procurement of Funds. ...
  
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  Investment of Funds. ...
  
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  Surplus Disposal.
  

2.What are principles of financial management?
The five principles are consistency, timeliness, justification, documentation, and certification.

3.What is accounting rules
3. Golden rules of accounting
The world of accounting is run by credits and debits. Debits and credits make a book’s world go ‘round.
Before we dive into the golden principles of accounting, you need to brush up on all things debit and credit.
Debits and credits are equal but opposite entries in your accounting books. Credits and debits affect the five core types of accounts:

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  Assets: Resources owned by a business that have economic value you can convert into cash (e.g., land, equipment, cash, vehicles)
  
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  Expenses: Costs that occur during business operations.
  
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  Liabilities: Amounts owed to another person or business.
  
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  Equity: Your assets minus your liabilities
  
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  Income and revenue: Cash earned from sales
  

A debit is an entry made on the left side of an account. Debits increase an asset or expense account and decrease equity, liability, or revenue accounts.
A credit is an entry made on the right side of an account. Credits increase equity, liability, and revenue accounts and decrease asset and expense accounts.
4.What is income statement
An income statement is one of the three major financial statements, along with the balance sheet and the cash flow statement, that report a company’s financial performance over a specific accounting period.
The income statement focuses on the revenue, expenses, gains, and losses of a company during a particular period.
An income statement provides valuable insights into a company’s operations, the efficiency of its management, underperforming sectors, and its performance relative to industry peers.
5.What is balance statement?
It is a statement of a firm’s financial position as of particular date.
A balance sheet (also called the statement of financial position), can be defined as a statement of a firm's assets, liabilities and net worth.
It provides a snapshot of a business at a point in time. ... It got its name as assets minus liabilities (net assets) must equal the owner's equity (they must balance)
6.What is cash flow statement?
The Cash Flow Statement shows how a company raised money (cash) and how it spent those funds during a given period.
It's a tool that measures a company's ability to cover its expenses in the near term. ... Cash flow reflects a company's financial health, and its ability to pay its bills and other liabilities.
Components of the Statement of Cash Flows. The cash flow statement has 3 parts: operating, investing, and financing activities.
7.What are assets?
The are of two types current assets and fixed assets
In financial accounting, an asset is any resource owned by the business.
Anything tangible or intangible that can be owned or controlled to produce value and that is held by a company or simply stated, assets represent value of ownership that can be converted into cash.
On balance assets are shown in descending order of liquidity which CASH or current assets always listed first followed by fixed or less liquid assets
8.What are liabilities?
Liabilities are defined as a company's legal financial debts or obligations that arise during the course of business operations. ... Recorded on the right side of the balance sheet, liabilities include loans, accounts payable, mortgages, deferred revenues, earned premiums, unearned premiums, and accrued expenses.
There are classified into current and non –current OR short and long term liabilities
9.What is equity?
Shareholders' equity is the initial amount of money invested in a business.
If at the end of the fiscal year, a company decides to reinvest its net earnings into the company (after taxes), these retained earnings will be transferred from the income statement onto the balance sheet and into the shareholder's equity account.
This part represents a company's total net worth.
In order for the balance sheet to balance, total assets on one side have to equal total liabilities plus shareholder
Equity on the other side as we learned earlier
10.What is ratio analysis?
It is the quantitative relation between two amounts showing the number of times one value contains or is contained within the other
Example
APPLES = 100 BANANA=50
What is the ratio of apples to banana?
RATIO= APPLES/BANANA 100/50=2
Shown as 2:1 This means for every 2 apples there is one banana
It is comparing two quantities