Financial management, Financial Management

What is Financial Management? Anybody can describe it.

Posted Date: 2/13/2013 4:15:21 AM | Location : United States





Meaning of Financial Management

The meaning of Financial Management is organizing, planning, directing and controlling the financial activities like procurement and use of funds of the enterprise. It means applying general management principles to financial resources of the enterprise.

Scope or Elements of Financial Management

1. Investment decisions involves investment in fixed assets (called as capital budgeting). Investment in current assets is as well a part of investment decisions called as working capital decisions.

2. Financial decisions - They relate to the raising of finance from several resources which will depend on decision on kind of source, period of financing, cost of financing and the returns thereby.

3.Dividend decision - The finance manager has to take decision along with to the net profit distribution. Net profits are usually divided into two:

a. Dividend for shareholders- Dividend and the rate of Dividend has to be decided.

b. Management: Cash is needed for many purposes like payment of salaries and wages and payment of electricity and water bills, meeting current liabilities, payment to creditors, maintenance of enough stock, purchase of raw materials, etc.

Financial controls: The finance manager has not just only to plan, procure and use the funds but he as well has to exercise control over finances. This can be done via several techniques like ratio analysis, cost and profit control, financial forecasting, etc.

Posted by Aliena | Posted Date: 2/13/2013 4:17:34 AM


Related Discussions:- Financial management, Assignment Help, Ask Question on Financial management, Get Answer, Expert's Help, Financial management Discussions

Write discussion on Financial management
Your posts are moderated
Related Questions
Explain the implications of purchasing power parity for operating exposure. Answer: Determine if the exchange rate changes are matched by the inflation rate differential among

Multi-period Compounding or else Future Value :- If the company determination compounding interest half-yearly (semi-annually) instead of annually then investors will gain as he wi

Following are the areas an analyst should consider while assessing the creditworthiness of an issuer. 1. Security Limitations: The bond indenture shoul

Decentralization This is a company power structure in which authority and decision-making responsibility are diffused throughout various stages of an organization. Decentraliz

Hedge Fund Indices Substantial increase in the use of Hedge Funds in recent times has created demand for appropriate indices that can offer a good tool to assess and benchmark

Explain the terminal value calculation at the end of the forecast period.  Why is it necessary? The firm whose business operation is being valued isn't expected to suddenly cea

What are sources of funds for an assignment?

WHAT ARE THE TOOLS OR MECHANISMS THAT CAN BE USED TO ACCESS ECONOMIC RECESSION?

Q. Explain Financial Management in brief? In the management of business firms, there are various well known functional areas such as Production Management, Materials Management

Modi Wires and Cable Ltd intends to finance its INR 20 million modernization plan for which it is trying to decide between debt and external equity. The management feels that the e