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Financial Management

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8 views

Financial Management

Uploaded by

asd 123
Copyright
© © All Rights Reserved
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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FINANCIAL

MANAGEME
NT
Financial Management

-is a functional unit of business organizational that sets policies towards organizing,
planning, controlling and directing the proper use and allocation of its financial
resources. It carries with it an interlocking coordination within the business structure
such as production, marketing, logistic and personnel functions.

--is considered to be one of the most significant responsibilities within the business
entity.
IMPORTANCE OF FINANCIAL
MANAGEMENT:
1. Guarantee rational and attractive return on investment made in the
business.
2. Examine business financial performance for growth and expansion.
3. Plan, direct and control the use of financial resources
4. Ensure maximum and efficient flow of operation.
5. Create pleasant and amiable relations with company stakeholder.
6. Harmonize operations of different facets of the business.
7. Build up appropriate controls to secure proper use of financial resources.
FUNDAMENTALS CONCEPT IN
FINANCIAL MANAGEMENT

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.
RESEARCH, TIME and KNOWLEDGE

 Businesses would require a significant amount of financial information. These


information take some time to collect and are product of past business transaction.
Even if the data are collected, it would undergo a process of analysis and
interpretation so it can be used to make economic decisions. Thus, an extensive
amount of research, time and in depth knowledge is needed to make these financial
information relevant.
COST
 -is one of the considerations in financial management. Since financial data would
require analysis and interpretation, the company would need experts or
knowledgeable professionals to do the job. As such, an appropriate cost is
necessary to attract this type of personnel.

REVISION AND ATTENTION


 -Internal and External factors surely affect the financial needs of a business. Thus,
constant study and undivided attention will be needed to identify these factors and
make adjustment on the company’s financial plans and objectives.
POWER
 Financial Managers are given the power to make judgement call specially when the
operations of the business will be affected. Not all financial decisions maybe
popular to stakeholders and thus might lead to unpleasant situation or
misunderstanding within the company’s organizations structure.

ACCOUNTABILITY
 Financial Management focuses on various control procedures related to the use of
financial resources. It places a heavy burden on accountability as those involved
need to monitor and make sure compliance is done to every set of procedures and
policies with regards to the management of company’s financial resources.
MONEY AVAILABLITY and PLANNING
Managing finances results to be able to identify the resources and uses of it. It gives
the financial managers the edge of knowing when funds will be available. Given this
knowledge, financial managers may be able to predict money availability or possible
shortage of it. As such, appropriate measures can be maid to avoid untoward situation
that may affect company operations.

CONFIDENCE
Financial management adds value and develops more confidence in the business
entity. It add value and confidence in the sense that this aspect of management put
strong emphasis on efficient planning and control in the flow and outflow of funds.
As such, stakeholders can be assured that proper procedures and policies are in place
to safeguard company’s financial resources.
ROLE OF THE FINANCIAL MANAGER
Among the most important functions of the financial managers are :
1. Raise Needed Funds for the Business operations
2. Proper Allocation of Financial Resources
-the following are need to be considered in order to make proper allocation of funds.
a. The business entity size and its capability for possible growth
b. Status of assets where the funds ill be used : either for the long term of Short term
c. Manner on which the funds are raised.
3. Profit Planning
4. Knwoledge of Capital Markets

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