Finance gestion
Finance is concerned with the money aspect of a business and gestion is the French word for management. Finance gestion or finance management is all about decisions taken by a business for acquiring and managing economic resources. Economic resources for a company or business include short term and long term capital funds. Finance gestion is all about procuring or getting funds for the business and using those funds effectively for achieving business objectives and targets. All types of organizations require finance gestion at various levels of performance.
This applies to even non-profit organizations. There have been instances of business going bankrupt or shutting down because the finance management by the business was not enough to take care of the financial needs of the business. Finance gestion or management is important not only when the business is not doing well but also when the business is making high profits. It is not profit that takes care of the survival of a business; it is proper financial management that is most important for any business today.
Objectives of finance gestion The two main objectives of finance management are profit maximization and wealth maximization. In this regard, the objective of finance management or finance gestion is the same as the objective of the company. Profit maximization involves risks. Financial management experts work at finding out ways and means by which the business can increase its profits while managing the risks involved. The second and most important objective of finance management is wealth maximization. Any business, whether it is a small firm or a multinational company, always looks at maximizing its value or wealth. The value of the business determines its position in the capital market. This is turn affects the earnings and profits of the business. The earnings of the business through investments and profits are greatly affected by proper or improper management of the funds of the business. The investors for the company are likely to change their mind, if they find that the finance management is not in professionally managed hands.
How is finance gestion undertaken? Finance management which involves procurement of funds for the business, uses various methods to attain its objectives. Funds can be procured from long-term sources or from short-term sources. Long-term fund sources are the sources, where the money borrowed can be returned at a future date. Such funds are procured from owners, shareholders, lenders, by issue of debentures and bonds, from financial institutions, banks and even from the public at large. Short-term funds are usually those funds, which are required to be returned back to the lender within a short span of time. Such funds can be procured from commercial banks, private institutions as well as from public deposits. Finance management experts keep a watch on the liquidity of the business at various points of time. Capital expenditure is closely monitored and utilization of current resources is given priority, whenever possible for increasing profitability of the business. When working capital of the business is efficiently managed, the business can increase its profitability without any problems to its liquidity status. Financial gestion also involves analysis of the business assets and liabilities from time to time.
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