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Financial Management

Financial Management

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Published by Udara Seneviratne
This PDF describes some theories and concepts under the financial management.
This PDF describes some theories and concepts under the financial management.

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Categories:Types, School Work
Published by: Udara Seneviratne on Jun 16, 2013
Copyright:Attribution Non-commercial


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1.1 Introduction to the topic and significance of the study
This study is on understanding the new trends of the financial management. As a result of rapid change of the business environment, each and every unit in an organisation is subject tochange within short time periods. It is obvious that novel trends are being created as a result of thisrapid change.Financial management which is a critical management unit in an organization shows somesignificant new trends in the business world. These trends are basically belong to the influences of IT, Law, Economy, etc.Especially IT or the Information Technology has become the most significant drivingfactor of creating new trends in financial management sector. With the development of technologynew Information Technology based applications are developed in a rapid speed for the field of financial management and related disciplines.Throughout this study it is going to be analysed the new trends which can be seen in thedisciplines which are related to the financial management, goals of the financial management,Agent relationship, problems of financial management and different business forms.Identification of different trends in financial management is so much useful in business tomake successful decisions in handling finance. The reason for that is most of times adapting to a positive trend can be converted to a competitive advantage of an organisation.
1.2 Question
What are the new trends in financial management ?
1.3 Objectives of the study
Identification of the new trends in financial management relate to following sections,
Other disciplines relate with financial management
Goals of the financial management
Different forms of business organisations
Agency problem & agency relationship
Additional trends in financial management1
2. Research Methodology
Research/ study was completed by analysing the previous research papers, reports, articlesand finance encyclopaedia which exist on the web. Numerous web pages related to above categorieswere referred to collect and analyse data to fulfil the objectives of the study.2
3.Analysis of the report
3.1 Definitions of financial management
According to
, “Financial management is concerned with the efficient use of animportant economic resource, namely, capital funds.”Economic resources :- A good or service that is acquired by an entity that is expected to providefuture benefits.Capital funds:- Sum of capital resources like equipment, equity etc. saved for a particular purpose.
According to
J. L. Massie
, “Financial management is the operational activity of a businessthat is responsible for obtaining and effectively utilizing the funds necessary for efficientoperation.”Operational activity :-An activity that directly affects an organizations cash inflows & out flows.Cash inflows results from sales of good or services, sale of shares etc. Cash outflow results frominventory purchases, interests, salaries etc.
According to
Weston & Brigham
, “Financial management is an area of financial decisionmaking harmonizing individual motives & enterprise goals.”
According to
Howard & Upton
, “Financial management is the application of the planning& control functions of the finance function.”Financial planning & control provides internal guidance in planning, steering and monitoring valuecreation; external guidance in supplying stakeholders with key corporate information.
According to
J. F. Bradley
, “Financial management is the area of business managementdevoted to the judicious use of capital & careful selection of sources of capital in order toenable a spending unit to move in the direction of reaching its goals.”
According to
Dr. S. N. Maheshwari
, "Financial management is concerned with raisingfinancial resources and their effective utilisation towards achieving the organisationalgoals."3

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