Are you looking for business finance homework help from the experts? Business finance is the process through which the company acquires capital and conserves it in order to meet the general financial objectives. Business finance is concerned with the management of the company’s assets and liabilities in order to ensure efficient and effective operations. It involves coming up with conceptual decisions financial decisions in order to attain the broad financial goals.
Business finance is a broad field and students can chose to major with finance as a career subject. Business finance homework help is the most sought after service for students perusing business course. We provide professional business finance homework help that will definitely earn you good grades at the end of your course work.
Need and importance of business finance
Business finance is essential for the success of any business. The financial need of an organization increases as the size of the business expands. There is need to include more comprehensive marketing campaigns, need to increase the productions capacity and the need to increase fixed assets. The manner in which the funds of the organization are managed is important towards ensuring its survival and profitability. The following are some of the reasons why business finance management is mandatory to any organization.
- Ensuring safe debt ratios
Although many businesses depend on debt for financing, it is important to ensure that the debt levels are safe. Too much debt compared to the income can create a financial uncertainty for the company. Manageable debt ratio is an indication that the company is able to meet its current financial obligation. This creates a good reputation to the current creditors as well as third parties willing to enter into transaction with the business.
- Used as a tool for growth
In most cases, to achieve more success the business has to expand its operational activities. A company requires additional inventory, staff and capital to attain growth and the only way to achieve this is through addition investment. It is important for financial managers to weigh the benefits and costs that come with the expansion before making the final decision to expand.
- Planning for startup capital
Every business idea requires a startup capital to bring it into reality. It is not only until the entrepreneur secures an initial capital that he can be in a position to start operating. Many entrepreneurs face a difficulty in choosing between equity and debt financing for startup. It is however important for the business owner to consider the profit breakthrough period before deciding on a given capital mix.
- Understanding business cycles
No matter the current performance of the business, there comes a time of unpredictable performance. Economic recessions present a hard time for business that can affect its future survival. It is important for any business to come up with a strategic plan to ensure business continuity even during hard times. Some strategies that the business can employ include diversification of investment, maintaining good credit history and cash savings among many other decisions.
We have looked at the need and importance of business finance and which basically forms the roles of a business finance officer in the organization. The period for the different financing decisions ranges from short- term, medium- term to long term. Financial decisions in any organization can be broadly classified into the following categories.
- Investment decisions
An investment decision pertains deciding on the organization capital composition total amount of assets to be held and risk involved in order to achieve wealth maximization goal. Investment decisions are important since they involve budgeting for limited available funds. Investment decisions can further be classified into capital budgeting and working capital management.
- Financing decisions
Once a company has settled on an investment decision, the next big task is sourcing for funds to finance the investment decision. Financing decisions entail finding the best means of sourcing for funds with affordable cost of capital in order to arrive at an optimum capital structure. Financing decision is a continuous process since companies constantly make decision on how best to invest funds for wealth maximization.
- Dividend decision
The final important financial decision is on deciding how the profits and gains realized by the company are going to be distributed to the shareholders. A dividend is part of the profit that is going to be distributed to shareholders after a certain time period; usually quarterly. Thus a decision has to be made on the best percentage to distribute to shareholders as dividends and the amount to keep as retained earnings.
Business finance homework help
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