Discussion: The Financial Decision (Other (Not Listed) Sample)

Discussion: The Financial Decision
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Discussion: The Financial Decision
Financial decisions form an important part of effective organizational management. All organizations ought to have a comprehensive financial system, which should be characterized by accuracy and transparency. The process of decision-making on financial matters of an organization is crucial. It is through financial decisions that organizations are able to acquire resources, and manage them appropriately in order to effectively, run their operations while simultaneously making profits (West, Dellana & Qian, 2005).
However, the process of making effective financial decisions faces a number of challenges. Among the main difficulties faced when making financial decisions are balancing between the income and expenditure of an organization to attain its long-term financial objectives. Another challenge of making financial decisions is identifying an appropriate line of investment in which to put organization’s resources, which guarantees significant returns (Zopounidis & Doumpos, 2002).
Organizations or companies have different financial packages with which it obtains resources. Among the main sources of finances for organizations are short-term and long-term loans, foreign currency loans, shareholder’s money, and values of the company’s shares. It is recommendable that companies use stakeholder’s money and resources obtained from the sale of its shares to fund its operations rather than loans. The use of loans to fund organizations subjects them to debts, which they often pay with high interests. However, the use of resources from share sales and stakeholder’s money...