Business Finance 12th commerce- A Complete Guidance for Study

Now that your board exams are just around the corner in Coming Jan – Feb 2021, are you fully prepared to score decent marks in all your subjects? If you are nervous regarding business finance, then don’t worry because you will soon know about the important topics of the subject. Still, you have a long time to prepare to get a score in the 12th Exam.

Here are the last-minute notes of one of the most essential and tough subjects in 12th Classes in Nashik, complied by i-Pro Edu, Institute, Nashik:

1. What do you mean by business finance?

Ans) The funds required to manage the various business process is known as business finance.

2. Explain financial management.

Ans) according to the Best Commerce Classes in Nashik, financial management is the entire process starting from acquiring funds, distributing it in the business processes, and investing the surplus amounts to ensure smooth management of businesses.

3. What are the objectives of financial management?

Ans) Every business should aim for financial management for the following reasons:

• To maximize profit
• To ensure proper maintenance of the liquidity of the firm.
• To cater to the financial liabilities.
• To make the most of the funds acquired in various ways.

4. What are three vital decisions every finance manager has to take?

Ans) The major financial management decisions are dividend, investment, and financing decisions.

5. Explain the factors affecting each of the decisions:

Ans)  As per the lectures of the best Finance classes in Nashik, the investment decision is about strategically choosing the firm’s assets.

Factors affecting this decision:

• The cash flow of the project of the firm
• Expected ROI
• Market risks

The financing decision talks about the composition of the firm’s capital structure in terms of two categories, owners’ funds and borrowers’ funds.

Factors affecting this decision:

• Condition of the capital market
• Operating expenses of the firm
• Fixed costs of the firm

The dividend decision explains whether the surplus should be divided among the shareholders as a dividend.

Factors affecting this decision:

• Preference of shareholders
• Stock market condition
• Stability of earnings and dividend

Start revising these topics as there is a high chance of these questions coming in your 12 boards this year. However, in case you still have doubts, consult the Best Commerce Academy in Nashik.