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Objectives and Importance of Finance Management in MNCS

So therefore they will also have to frame their policies according to the culture & investment policies of such countries. MNCs also have to take into account various economic factors into account while framing their finance policies viz. changes in exchange rates, differences in national inflation rates, difference interest rates etc. Among these the exchange rate variation is probably the most important. Exchange rates of different countries differ from one to the other & from time to time. So MNCs has to factor in the difference while framing their finance management policies. It also affects the way they prepare their financial statements i.e. the balance sheet, which is a statement showing profit & loss of the company.

The obvious objective of finance management is to ensure that all operations run smoothly in the company. After all, any kind of work requires continuous inflow of money to make it run smoothly. That is what finance management does. Finance management also ensures that the revenues earned by the company properly kept & utilized to the benefit of the organization. Finance management also looks for sources of money if money is required for some new project or for an existing project. By performing all these functions finance management ensures smooth running of the MNCs overall. Importance of finance management lies in the functions they perform. The functions of finance management are of utmost importance to a company whether it’s a domestic one or an MNC.