FINANCIAL MANAGEMENT

“TO STUDY ON FINANCIAL FUNCTIONS OF BENCO OIL”

PROJECT REPORT

SUBMUTTED BY:

SUMI MURUGAN P K

ROLL NO: 52

3rd Trimester

SUBMITTED TO:

PROF. DEEPAK M

MBA DEPARTMENT

MES College of engineering

MALAPPURAM DT, KERALA

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 TABLE OF CONTENTS

CHAPTER TITLE PAGE NO.

1 INTRODUCTION 3

2 COMPANY PROFILE 7

3 RESERCH METHODOLOGY 9

4 DATA ANALIYSIS AND 11

INTERPRETATION
5 FINDING, SUGGESTION 13
&CONCLUSION
BIBLOGRAPHY 15

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 CHAPTER-1
INTRODUCTION

INTRODUCTION

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The responsibilities for financial management are spread throughout the organization in the
sense that financial management is, to an extent, an integral part of the job for the .managers
involved in planning, allocation of resources and control. For instance, the production manager
(engineer) shapes the investment policy (proposal of a new plant) the marketing manager/analyst
provides inputs in forecasting and planning the purchase manager influences the level of
investment in inventories and the sales manager has a say in the determination of receivables
policy. Nevertheless, financial management is highly specialized in nature and is handled by
specialists. Financial decisions are of crucial importance. It is, therefore, essential to set up an
efficient organization for financial management functions.

Since finance is a major/critical functional area, the ultimate

responsibility for carrying out financial management functions lies with the top management, that
is, board of directors/managing director/chief executive or the cornerstone of the board. However,
the exact nature of the organization of the financial management function differs from firm to firm
depending upon factors such as size of the firm, nature of its business type of financing
operations, ability of financial officers and the financial philosophy, and so on. Similarly, the
designation of the chief executive of the finance department also differs widely in case of different
firms. In some cases, they are known as finance managers while in others as vice-president
(finance), director (finance), and financial controller and so on. He reports directly to the top
management. Various sections within the financial management area are headed by managers
such as controller and treasurer.

Definition of Finance Functions

The Finance Function is a part of financial management. Financial Management is the activity
concerned with control and planning of financial resources. In a business, the finance
function involves the acquiring and utilization of funds necessary for efficient operations. Finance is
the lifeblood of a business without it things wouldn’t run smoothly. It is the source to run any
organization, it provides the money, it acquires the money.

The Finance function has been classified into three:

 Long-Term Finance– This includes finance of investment 3 years or more. Sources of

long-term finance include owner capital, share capital, long-term loans, debentures,
internal funds and so on.

 Medium Term Finance– This is financing done between 1 to 3 years, this can be
sourced from bank loans and financial institutions.

 Short Term Finance – This is finance needed below one year. Funds may be acquired
from bank overdrafts, commercial paper, advances from customers, trade credit etc.

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Objectives of Finance Functions

 Investment Decisions– This is where the finance manager decides where to put the

company funds. Investment decisions relate to management of working capital, capital
budgeting decisions, management of mergers, buying or leasing of assets. Investment
decisions should create revenue, profits and save costs.

 Financing Decisions– Here a company decides where to raise funds from. They are
two main sources to consider from mainly equity and borrowed. From the two a decision
on the appropriate mix of short and long-term financing should be made. The sources of
financing best at a given time should also be agreed upon.

 Dividend Decisions– These are decisions as to how much, how frequent and in what
form to return cash to owners. A balance between profits retained and the amount paid
out as dividend should be decided here.

 Liquidity Decisions– Liquidity means that a firm has enough money to pay its bills
when they are due and have sufficient cash reserves to meet unforeseen emergencies.
This decision involves management of the current assets so you don’t become insolvent
or fail to make payments.

Why a Business Needs The Finance Functions

 Helps Establish a Business– Without money, you cannot get labor, land and so on with
the finance function you can determine what is required to start your business and plan
for it.

 Helps Run a Business– To remain in business you must cater for the day to day
operating costs such as paying salaries, buying stationery, raw material, the finance
function ensures you always have adequate funds to cater for this.

 To Expand, Modernize, Diversify– A business needs to grow otherwise it may become

redundant in no time. With the finance function, you can determine and acquire the funds
required to do so.

 Purchase Assets-You need money to purchase assets. This can be tangible assets like
furniture, buildings or intangible like trademarks, patents etc. to get this you need
finances.

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Importance of Finance Functions

 Identify Need of Finance-To start a business you need to know how much is required to
open it. So, the finance function helps you know how much the initial capital is, how
much of it you have and how much you need to raise.

 Identify Sources of Finance-Once you know what needs to be raised you look at areas
you can raise these funds from. You can borrow or get from various shareholders.

 Comparison of Various Sources of Finance– After identifying various fund sources

compares the cost and risk involved. Then choose the best source of financing that suits
your business needs.

 Investment-Once the funds are raised it is time to invest them. Investment decisions
should be done in a manner that a business gets higher returns. Cost of funds
procurement should be lower than the return on investment; this will show a wise
investment was made.

The Finance Function Involves

 Ensure enough funds at reasonable cost.

 Ensure safety of funds.
 Ensure efficient effective and profitable utilization of funds.
 Ensure that finance funds don’t remain idle.

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 CHAPTER-2
COMPANY PROFILE

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 COMPANY PROFILE
BENCO COCONUT OIL

Benco Coconut oil brings the goodness and purity of coconut oil from God's own country.
In an effort to counter adulteration in the coconut oil market and to make pure coconut oil available
in the country, Akbar Group ventured to the Food & Beverage industry by launching the company
– Benzy Food & Beverages Pvt. Ltd.

Benco coconut oil is a trusted brand name that is synonymous with purity. This product
has received the AGMARK approval from Ministry of Agriculture, Government of India. The
Company has also obtained ISO 9001-2000 certification for its management and manufacturing
process.

Benco coconut oil is manufactured in the modern plant at Ponnani, Kerala under stringent
hygienic conditions. Best quality Malabar copra (dry coconut) is fed into the oil extraction machines
through conveyers. Benco coconut oil is so pure that it can be used for various purposes like
cooking, body massage and application on hair and scalp. It can also be used in open lamps as it
does not result in a smoky flame.

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 CHAPTER 3
RESEARCH METHODOLOGY

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RESEARCH
Research means a search for facts- answer to questions and solutions to problem .It is a
purposive investigation. A research can be defined as a scientific and systematic search for
pertinent information on specified topic

RESEARCH METHODOLOGY
This study is done by interacting with consumers.

OBJECTIVES OF THE STUDY

 To identify financial functions in benco oil.

SOURCE OF DATA COLLECTION

PRIMARY DATA
Primary data will be collected through structured questionnaire which may be filling up by
respondent

SECONDARY DATA
Secondary data will be collected from various books, journals, and internet

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 CHAPTER 4
DATA ANALIYSIS AND INTERPRETATION

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Importance of Finance Functions

 Identify Need of Finance-To start a business you need to know how much is required to
open it. So, the finance function helps you know how much the initial capital is, how
much of it you have and how much you need to raise.

 Identify Sources of Finance-Once you know what needs to be raised you look at areas
you can raise these funds from. You can borrow or get from various shareholders.

 Comparison of Various Sources of Finance– After identifying various fund sources

compares the cost and risk involved. Then choose the best source of financing that suits
your business needs.

 Investment-Once the funds are raised it is time to invest them. Investment decisions
should be done in a manner that a business gets higher returns. Cost of funds
procurement should be lower than the return on investment; this will show a wise
investment was made.

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 CHAPTER 4
FINDINGS, SUGGESTION AND CONCLUSION

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 FINDINGS
 Their finance function helping to drive the business forward.
 There have some risks.
 The study shows they face some problems when working capital requirements.
 The relationship with funder is less.
 There were no credit facilities.
 Not take any loans from the bank or any other financial institutions.

SUGGESTIONS
 Keep good records to minimize risk.
 Pay suppliers on time, control expenses carefully, emergency loans can be a short term solution ,etc…
can avoid problems when working capital requirements.
 Make a good relationship with funder.
 Make credit facilities and thereby increasing sale.

CONCLUSION
Financing short-term needs is essentially a financing of
current assets using short-term financial resources. Current assets, however, are usually funded in
part through long-term financial resources that can fund a permanent as well as transitional part of
current assets. Different sources are used to finance current assets. It is mainly the trade credit,
which is a natural source of financing of the customer by the supplier. It represents the customer's
liabilities arising from the delay payments to suppliers for the receipt of the goods. Short-term bank
loans are loans whose lenders are banks. Loans are provided in various forms. Knowledge of
forms and parameters of short-term bank loans is a prerequisite for the effective management and
the use of bank loans to the fulfillment of the objectives of the company.  Part of the short-term
financial resources is a variety of obligations, which form a source from their creation to the time of
their payment. Optimal composition of short-term financial resources contributes to ensure the
ability to pay as one of the fundamental objectives of the company in its financial management.

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 BIBLOGRAPHY

 https://www.finance-assignments.com/organisation-of-finance-function-3162
 https://www.managementstudyguide.com/role-of-finance-function-in-organizational-
processes.htm
 https://saplingfinancial.com/blog/company_finance_department/

APPENDIX

QUESTIONNAIRE

1. Is your finance function helping to drive the business forward?

2. Are you getting relevant management information that helps make business decisions?

3. Are business risks being minimized?

4. Is your working capital requirement being managed?

5. Are your relationships with funders strong?

6. Are you take any loans from the bank or any other financial institutions?

7. There are any credit facilities?

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