Mamajonova Dilafro’z i-82(I) 15-variant

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TASK 2. ESSAY 
Ergasheva Maftuna i82i 
Option-8. What are financial decisions of enterprises? 
Financial decisions are the decisions taken by managers about an organization’s 
finances. These decisions are of great significance for the organization’s financial well-
being. The financial decisions pertaining to expenditure management, day-to-day 
capital management, assets management, raising funds, investment, etc. The assets and 
liabilities of the organisation are affected by financial decisions. Undertaking efficient 
financial decisions can lead to immense revenue over a long term period. Investment 
decisions are significantly immense decisions. Besides this, financing and dividend are 
also essential aspects of financial decisions. 
The purpose of the financial decision is to maintain an optimum capital structure. An 
optimum capital structure involves a suitable mixture of debt and equity. This way, 
shareholders can establish a trade-off between the risk and return. 
An excellent example of a financial decision is when a firm selects a funding method. 
This selection takes place after the firm assesses its financial status and sources. This 
firm may decide whether to issue equity shares or debentures based on its assessment. 
To make financial decisions for your business, you need a tool that can provide you 
with the right information. A tool that tells you exactly what is going on, so you can 
decide on what to change and what to keep as is. Financial statements do just that – 
provide a snapshot of your business finances at any given period. Their purpose is to 
provide you, the business owner, a quick overview of your business’s financial health 
and measure business performance. 
In conclusion, financial decisions are the decisions that managers of an organisation 
make about the finances. These decisions play a huge role in the financial well-being of 
an organisation. There are three types of financial decisions- investment, financing, and 
dividend. Managers take investment decisions regarding various securities, instruments, 
and assets. They take financing decisions to ensure regular and continuous financing of 
the organisations. The dividend decision has to do with the correct amount of reward to 
its shareholders. Finally, read the various factors affecting financial decisions.