Definition of financial management, Financial Management

DEFINITION OF FINANCIAL MANAGEMENT

Financial Management is a stream concerned with the generation and allotment of scarce resources (generally funds) to the most proficient user in the firm (the competing projects) via a market pricing system (i.e., the obligatory rate of return).

A firm needs resources in form of funds raised from investors. The funds should be allocated in the organization to projects that will yield the maximum return.

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