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PROJECT TOPIC: THE ROLE OF CORPORATE FINANCE MANAGEMENT IN THE POLICY MAKING DECISION OF A CORPORATE BODY

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CHAPTER ONE

 INTRODUCTION

  HISTORICAL BACKGROUND TO  THE STUDY

Financial management involves all activities of a financial manger concerned with raising of capital, planning cash and credit requirements including the effective control of financial resource of a corporate body.

The activities could be segregated as follows

i)     Converting of forecast into plans and budgets

ii)   Planning the appropriate capital structure

iii)   Raising cash from outside the business

iv)   Forecasting the future availability of and requirements of cash.

v)     Investing surplus funds

vi)    Controlling cash balances and flows in accordance with plans and with changing circumstance. (Gray et al (1977)

With the emergence of finance as a separate field of  study the emphasis was more or less on legal matters such as

Since most business firm’s    objectives are profit maximization the search for profitability under imperfect/perfect competition continues to be the induction to improve the wealth of the owners.

This urge to implore and maximize, wealth has led to the study of financial management of which attribute factors can be socialized as follows:

a.     Saving

b.    Business growth

c.    Research and development expenses

d.    Inflation

e.    Competitor etc.

Based on the above background,  some taught to were given a financial management to provide skillful planning control and execution of financial   activities.    The praising   managers are interested in this subject because among the most crucial decisions of the firm are those which related, to finance and therefore need to understand financial management which provides them with conceptual and analytical insight of the capital funds and using the suppliers of fund are called the finance function of any firm.

1.1       GOALS AND OBJECTIVE/ROLES OF FINANCIAL MANAGERS.

Finance which is the life wire of any business organization and it is developed in 1900s since it concerns with the actual flow of money as well as any clam.  Against money.

The financial manager subsequently decisions are made in much  more co-ordinated marker directly responsible for   the control process.

The principal responsibility of financial manager involves a theory of Evaluation of investment financial and dividend decisions with the objective of maximizing wealth.   The financial manager studies the factors which influence both internal and external environment.  Only   sound financial decision based on analysis    the planning and control activates therefore can help optimization of value of operations.

Optimization of profits and share holders wealth is one of those guiding objectives  of business  enterprise,  which govern it allocation of resource and other financial  decision of managers.



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