Comment on the following: Investment, financing and dividend decisions are inter-related finance functions.

Financial Management is concerned with investment, financing and dividend decisions in relation to objectives of the company. Investment decisions: Ordinarily means utilisation of money for profits or returns. These decisions are concerned with addition to capital assets in view to increase the net worth of the firm. Financing decisions: This is the next step in financial management for executing the investment decision once taken. Financial decisions encompass determination of the proportion of equity capital to debt to achieve an optimal capital structure, and to balance the fixed and working capital requirements in the financial structure of the company. Dividend decisions: This is another major area of financial management. The financial manager must decide whether the firm should distribute whole profits/part profits or retain them.