Financial Decisions

FINANCIAL DECISIONS

1. Investment Decisions:
   1. Involves decision regarding short term (working capital) required for operational and day-to-day activities
   2. Long term (capital budgeting) investment in assets require funds for the setting up a new project or for expansion and modernization, machinery, building, etc
2. Financing decisions:-
   1. Decision relates to various sources of finance i.e. equity shares, preference and debenture
   2. And relative proportion between them to form a capital structure
3. Dividend decision: -
   1. Profit may either reinvest in the business for growth and expansion or it may distribute as dividends to the shareholder.
   2. Manager has to maintain the balance between the two.