(a) Estimation of capital requirements– A finance manager has to make estimation with regards to capital requirement of the company. This will depend upon expected costs and profits and future programmes and policies of a concern. Estimation have to be made in an adequate manner which increases earning capacity of enterprise.
(b) Determination of capital composition – Once the estimation have been made, the capital structure have to be decided. This involves short term and long term debt equity analysis. This will depend upon the proportion of equity capital a company is possessing and additional funds which have to be raised from outside parties.
