JAPAN MALAYSIA TECHNICAL INSTITUTE

MODULE ASSIGNMENT

EXCUTIVE BACHELOR IN OPERATIONS MANAGEMENT

MODULE: 13
FINANCE AND MANAGING COSTS

DURATION: 2 MONTHS

INSTRUCTION:

(Assignment Question) : Kindly answer one question. (60%)

SPECIFIC INSTRUCTION

1. Answer in English or Bahasa Malaysia.

2. Number of words : 2500 – 3000 words excluding references.
3. Submit your assignment ONCE only in a SINGLE file.
4. You can submit by a GROUP ASSIGNMENT also.
5. This assignment accounts for 60% of the assessment for the module.
6. The assignment should be an original piece of work. Plagiarized assignment will be rejected.

1
QUESTION 1
What is financial management explain its importance? – 60%

Introduction – 10%
Financial management is strategically planning how a business should earn and spend money.
This includes decisions about raising capital, borrowing money and budgeting. Financial
management also involves setting financial goals and analyzing data. Financial management
starts with recording all the money your business earns and spends. Accountants then prepare
reports that help owners understand the financial health of their business. These include profit and
loss statements, balance sheets, cash flow statements and budgets.

Discussion Points – 40%

• Capital Expenditures - You purchase assets to create income.
• Operating Cash - You must manage your cash flow so you always have enough on hand
to pay for rent, utilities, telephone, insurance, payroll and supplies.
• Lowering Expenses - One of your financial management responsibilities is to keep costs
as low as possible.
• Tax Planning - Your financial management duties include planning for taxes

Conclusion – 10%
Financial management of your small business encompasses more than keeping an accurate set
of books and balancing your business checking account. You must manage your finances so you
don’t overspend and so you remain prepared for all expenditures, as well as profit distributions.
Your financial management responsibilities affect all aspects of your business. A company that
sells well but has poor financial management can fail.

2
QUESTION 2
What is meant by financial management explain its nature and importance? – 60%

Introduction – 10%
Financial management is an organic function of any business. Any organization needs finances
to obtain physical resources, carry out the production activities and other business operations, pay
compensation to the suppliers, etc. There are many theories around financial management. Some
experts believe that financial management is all about providing funds needed by a business on
terms that are most favorable, keeping its objectives in mind. Therefore, this approach concerns
primarily with the procurement of funds which may include instruments, institutions, and practices
to raise funds. It also takes care of the legal and accounting relationship between an enterprise
and its source of funds.

Discussion Points – 40%

• Investment Decisions: Managers need to decide on the amount of investment available out
of the existing finance, on a long-term and short-term basis.
• Financing Decisions: Managers also make decisions pertaining to raising finance from
long-term sources (called Capital Structure) and short-term sources (called Working
Capital).
• Dividend Decisions: These involve decisions related to the portion of profits that will be
distributed as dividend. Shareholders always demand a higher dividend, while the
management would want to retain profits for business needs.

Conclusion – 10%
Financial Management means planning, organizing, directing and controlling the financial
activities such as procurement and utilization of funds of the enterprise. It means applying general
management principles to financial resources of the enterprise.