AN OVERVIEW OF FINANCIAL MANAGEMENT

Definition of Financial management Financial management is the operation activity of a business that is responsible for obtaining and effectively utilizing the funds necessary for efficient operations.

FinancialManagement Financial Management is concerned with the acquisition, financing and management of assets to achieve organizational goal

 Interface of Financial Management with other Disciplines: Economics Accounting HR Production Marketing

Financial Decisions InvestmentDecision: Decision which is related to the selection of assets FinancingDecision: Determination of proportion of debt and equity in capital structure DividendDecision: It involves determination of portion of EPS to be declared as dividend per share.

Financial manager Financial manager has to forecast expected events in business Anticipating financial needs budgets Acquiring financial resources Allocating funds in business Administrating the allocation of funds-flow of funds Analysing the performance of funds-liquidity Accounting and reporting to the management

Role and Functions of Financial Management To participate in the process of funds to work with in the business and to control their productivity To identify the need forf unds and select Sources from which they may be obtained. Liquidity Profitability Management

Key challenges for financial manager Investment planning Financial structure Mergers, acquisitions and restructuring Working capital management Performance management Risk management Investor relations Foreign exchange management Licensing Credit management