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Financial management: It is actually the study of controlling flow of funds and monetary resources, proper plan, monitor, direct and also organize all types of resources in an organization so that it going maximum profit in longer period of time.
Financial decisions and their inter- relation:
Investment and spending are but two virtual sides of the same coin. Foremost, what is essential is that there must be a steady and stable source of earning or income. One that is taken care of, one must determine, what is to be spent or utilised for using or to ensure that that the business is a going-concern, such as salaries to employees, rent, electricity, tax, etc. and then to oversee that there is something kept to be used for recycling money by way of investments.
Investments may be of varied nature. It actually depends on the risk appetite of an individual or an entity. While some forms of investments fetch very high returns, the risk quotient involved is also on the higher side. Whereas other forms of investment may mean steady and periodical returns over a time frame, without promising a fortune.
Hence, what is essential is that the person must indulge in financial diversification of its portfolio. As the famous saying goes “Never keep all your eggs in one basket. To ensure a steady growth of your wealth combined with high returns on investments, one must seek financial diversification and ensure a steady combination of instruments so as to maximise its yield.
To ensure the above, it is of utmost significance that a proper balance is found vis-à-vis income, investments and spending. And that is precisely the idea of our Inter-Relation among Financial Decisions Homework Help team is going to teach our students.
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