How much finance is required by a company

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Reference no: EM133560704

Explain this whole part for my report in class

-take your time, I'm not in rush

-explain every details for me to understand better

-just use simple terms(not technical term)

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Scope of Financial Management

The cope of financial management includes the following A's.

1. Anticipation
In financial management, estimation of a firm's needs is important as well as estimating the amount of income that may enter the company or the amount of expense that a company must incur. Anticipation involves finding out how much finance is required by a company.

2. Acquisition
Once the required capital or finance is determined by the company, then the company must find out how these finances will be procured from different sources.

3. Allocation
The collection of a firm's finances will now be determined on where it will be spent. Will it be spent to purchase a fixed asset? Or will it be used to purchase inventories to increase sellable products?

4. Appropriation
Upon earning profits, appropriation means the decision of the firm to determine the division of profits among shareholders, credit holders, or will it be part of a firm's reserved capital.

Reference no: EM133560704

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