Financial investment

Every organization has a scarcity of finance whereas he has to perform many functions so he performs his financial activities like arranging, utilizing, expanding investing of finance by an effective efficient way to achieve the objective of the organization.

Financial investment is part of financial management. The process in which the organization calculates the risk and selects one of the best alternatives that give a maximum return at minimum risk this process is called financial investment.

In other words, we can say that financial investment is the process of utilizing our resources in such type of way that it gives a maximum return. This process is called financial investment. 

Nature:

1. It is an internal function of a manager.

2. It is a financial function.

3. It is a risk-oriented function.

4. It is a forecasting-based function.

5. It is a scientific and systematic function.

Objective:

1. Maximum utilization of finance- It is the first objective of financial investment. Every organization wants optimum utilization of resources so financial investment helps us to maximize the utilization of finance.

2. Proper cash flow- There are many sources of cash for the organization. There are also many ways organization expands their cash so they have made a balance between incoming cash and outgoing cash. Financial investment helps us to maintain the cash balance inside the organization.

3. To maintain fund flow- Fund flow is also an important function of financial management. Every organization wants to invest its money in such type of area in which it obtains the best return. Financial investment cares about all alternatives and chooses one of the best alternatives so it also helps us in maintaining fund flow.

4. To maintain working capital- The amount that is used to perform day-to-day activities of the organization. This amount is known as working capital. Financial investment also helps us to decide the working capital of the organization.