Question

The manager not only has to acquire finance but also optimize its utilization. Explain.

Answer 1

• The financial manager studies the position of working capital and fixed capital thoroughly. He also studies the factors that affect these capitals.
• After studying the requirement the manager has to study the various sources of finance such as equity shares, preference shares, debentures, bank loan, etc. and prepare the right mix of finance sourcing.
• The task does not get over at just acquiring finance. The manager also needs to see that it is utilized and allocated properly. Failure to do so can lead to disaster or losing important capital raised for the business.