Financial management is the management of all financial activities that includes processes such as planning, directing, organizing and controlling. In other words, it can be defined as the application of general management principles to financial activities of the enterprise. The basic objectives of financial management have been highlighted in the Financial Management Assignment. Some of them are given below: –
- One of the main objectives of financial management is to maximize the wealth of shareholders. It is a great approach that aims at the growth of the organization.
- To cut down additional and unnecessary costs for effective utilization of funds. It will reduce the wastage of funds in useless assets.
- To ensure that sufficient amount of funds is available at the time of need. It is an important step that must be taken by the management for a sound financial condition of the business.
Functions of Financial Management:
Financial management plays a crucial role in business and has numerous functions. The various functions of financial management have been discussed in the Financial Management Assignment. Some of them are mentioned below: –
Investment of Funds- It is the task of financial manager to allocate and invest funds into profitable ventures in order to ensure the safety of funds in the investment.
Estimation of Capital Requirement- the capital requirement is estimated according to the profits, expected costs and future policies of a firm. An adequate estimation is necessary for the growth of the firm.
Management of Cash- financial managers have to make decisions regarding cash management. The management of cash is required for many purposes like raw materials, maintenance of stock, wages and salaries, creditors, bills, etc.
Financial Control- it is important of financial management. It can be done through techniques like financial forecasting, ratio analysis, cost and profit control, etc.