Finman 2a
Finman 2a
- It is a functional unit of a business organization that sets policies towards organizing, planning,
controlling and directing the proper use an allocation of its financial resources.
- It carries an interlocking coordination within the business structure such as production,
marketing , logistics and personal functions.
- -it is considered to be one of the most significant responsibilities within the business entity.
Financial management is in charge of efficient planning and control of funds inflow and outflow
1. The appropriate magnitude or volume of funds needed for efficient operations ( capitalization_
2. The wise allocation of financial resources to particular resources
3. The short and long term fund raising activities
An extensive amount of research, time and in deep knowledge us needed to make these financial
information relevant.
Revision and Attention- Constant study and undivided attention will be needed to identify these factors
and make adjustments on the company’s financial plans and objectives
Power – Financial managers are given power to make judgement call specially the operations of the
business will be affected.
Money Availability and Planning – managing finances results to being able to identify the sources and
uses of it. They may be able to predict money availability or possible shortage of it
Accountability – Financial management focuses on various control procedures related to the use of
financial resources. Those involved need to monitor and make sure compliance is done to every set of
procedures and policies with regard to the management of company’s financial resources
Confidence – Financial management adds value and develops more confidence in the sense that this
aspect of management put strong emphasis on efficient planning and control on the inflow and outflow
of funds.
a. The business entity size and its capability for possible growth
b. Status of assets where the funds will be used ( shirt term or long term)
c. Manner on which the funds are raised
3. Profit Planning
Profit is an inherent component to ensure business sustainability and survival. Thus profit
planning requires tremendous amount of rational forecasting of revenues and management of
cost and expenses
Among the factors that impact on business profit are product pricing, competition, economic
status, demand and supply, product costs and output
The FM should be able to keep an eye on all these factors in order to make desirable and realistic
financial plans to achieve the desired profits
4. Knowledge of Capital Markets
The FM should be able to make strong calculations and analysis of the various risks involved in
the trading of shares and securities.