DECISION IN

FINANCE
Financing Decision
○ It is concerned with the financing – mix or
capital structure of leverage.
○ It is concerned with the amount of finance to
be raised from various long term sources of
funds like equity shares, preference shares,
debentures, and bank loans.
Factors Affecting Financing
Decision
Risk – involved in raising funds
- the risk is higher in the case of debt
as compared to the equity
Cost – also in raising fund
- the manager chose the source with
minimum cost
Level of control – the shareholders want in the
organization also determines the
composition of capital structure
 Cash flow position
– regular day to day earning of
the company .
 Condition of the market

– matter a lot for the financing

decisions.
Operating
are determination made in regard to the
routine , on going activities of an
organization .
Types of operational :
 Pricing
 Discounts
 Promotions
 Collecting information
 4 Major Operational
Decisions
 Maintaining Inventory
 Logistic decisions
 Sales and outreach
 Employee management
 Customer management