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In response to a classmates answer, I would like to give positive feedback about her answer to the question.
What are 3 fundamental decisions that are of concern the finance team?
The 3 fundamental decisions in finance team revolve around financial management according to the article written by Illie (2015) for the challenges of finance on the function for the balance is, “The fast changes that took place in the economic environment to determine the role of financial managers is the function of the finance team. The three fundamental for finance team were linked mainly to financial reporting for making decisions to balance the budget for decrease or increase to firm assets is as follows according to Parrino, Kidwell & Bates (2009) for the Fundamentals of corporate finance are: 1. Capital budgeting decisions 2. Financing decisions 3. Working capital management decisions. Likewise Parrino et.al explained the impacts of each decision on the balance sheet as follows:
1. Capital budgeting decisions impact the right side balance sheet by identifying the cash on hand, inventory for how much to buy, and account receivable for the productivity of an assets that the firm has for the most important decision because they are the drive for the firm’s success or failure.
2. Financing decisions determine how the firm should raise capital to pay for assets or how to obtain an investment to finance the assets. An example of financial decision would be securing a bank loan, borrowing money, or selling debt to invest in buying a new plant or investing in a renovation of a facility to be profitable for capital market or upgrade product to make more profit. Financial decision team should always decide on a capital project that will increase the cash flow to increases the wealth of the firm.
3. Working capital management decisions determine how the firm’s capital structure of a firm short-term is assets and liabilities with impact the firm for long-term debt, and how the equity will be used to finance the long-term for productivity of assets so that the firm can pay its bill and have the surplus cash for reinvesting to create wealth for day to day growth operation that enables the firm to pay to avoid debt with excess cash.
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