The overall financial health of a business is determined by the quality of its financial management '. In the light of above statement , discuss some of the aspects which affect the financial health of a business.

Explanation

Some of the factors which affect the finanical health of a business are as follows.
(i) Size and composition of fixed assests For instance, if a decision is taken to invest ₹200 crore in establishing plant and machinery, then this decision would rasie the sie of fixed assets blocked by this amount.
(ii) The amount of long -term and short-term funds to be raised Financial mangement involves decision related to the proportion of long-term and short -term funds. For examples. if an orgainsation wishes to have more amount on a long-term basis. Such cases create problem in choosing liquidity or profitability.