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Q. Traditional Approach of Financial Management?
Traditional Approach: - Under this schema the role of financial management was limited to the procurement of funds on suitable terms. The utilization of money was considered out of the scope of financial management. Under this schema a study of the following three things was made for the procurement of money:
(1) Arrangement of money from Financial Institutions.
(2) Arrangement of money through financial Instruments like share and bonds etc.
(3) Legal as well as accounting relationship between a business and its source of funds.
The prominent feature of the traditional approach was the assumption that the duty of the finance manager was only to increase funds from external parties and that he wasn't concerned with taking the internal financial decisions. He wasn't responsible for the efficient utilization of funds.
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