FINANCE AND RELATED DISCIPLINES - Accounts and Finance for Managers

The study of role of finance in the organization is with reference to financial management. The financial management is the course which has drawn major focus points from the many more disciplines. To study them, the inter relationship in between the financial management and other related disciplines.

Finance and Other Related Disciplines

The following are the related disciplines viz

  • Finance and Economics
  • Finance and Accounting
  • Finance and Marketing
  • Finance and production
  • Finance and Quantitative Methods

Finance and Economics

The relationship in between these two disciplines are studied in two different headings viz Micro and Macro economics

The major part of the financial management is to raise the financial resource to the requirements. While raising the financial resources, the availability is subject to the macro economic influences.

  • Banking system
  • Money and capital markets
  • Financial intermediaries
  • Monetary and credit policies

Finance and Accounting

The two are embedded with different disciplines. The finance is the discipline which is mainly based on the cash basis of operations but the accounting is totally governed by the accrual system.

Accounting is mainly vested with the collection and presentation of data, but the finance is closely connected with the decision making of the organization.

Till this moment, the differences are discussed only to know the role of finance over the accounting of any organization. The following is the major relationship which lies in between the finance and accounting as follows "Finance begins where accounting ends"

  • Finance and Marketing: These two are disciplines are interrelated to plan for introduction of new product. The major reason is that the introduction of new product normally warrants huge sum of money for research and development; which needs immense planning and execution to succeed over the other competitors
  • Finance and Production: The changes in the production policy of the organization will impact the capital expenditures. The fixed assets of the organization should be effectively utilized which neither over capitalization nor under capitalization
  • Finance and Quantitative methods: These are inter related to solve complex problems in order to take decisions.

The objectives of the financial management are classified into two categories viz

  • Profit maximization
  • Wealth maximization

Let us discuss these two one after the another. The objectives of the financial management is discussed only to the tune of normative framework in between the financing, investment and dividend functions of the management.

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