LESLIE BATAO 02-02-24

BSA – 1A FINANCIAL MANAGEMENT

1. Why is financial management is important in the organization?

• Any business that wants to succeed must have effective fiscal management as every choice an owner makes
affects the company's finances. To successfully and efficiently accomplish the goals of the company, financial
resources must be planning, organizing, controlling, and monitoring. Making strategic and accurate decisions is
essential in a business. Organizations may assess possible investments, assess their financial status, and make
wise decisions that support their objectives by implementing good financial management. The instruments and
data required for evaluating a project's financial sustainability, projecting future financial needs, and allocating
resources efficiently are provided by financial management. In addition, it is essential to the long-term survival
and development of the company. It also aids in the identification and management of financial risks and
uncertainties, such as changes in the regulatory environment, market fluctuations, and unexpected expenses.

2. What method would you use to plan for financial management?

a. Planning
• Making a net worth statement, budgeting and cash flow planning, debt management plans, assessing
current financial situations, and establishing financial goals are the methods to be employed in financial
management planning. Evaluating income, expenses, assets, liabilities, and any current financial
commitments are all part of the process of assessing one's current financial situation. Setting goals is a
crucial component of financial planning because it gives your investments and financial decisions direction,
focus, and a clear purpose. Analyzing this data provides an accurate perspective on one's financial health
and helps identify areas for improvement and areas to be cautious about. Financial goals can be short-term,
intermediate, or long-term ambitions that are motivated by anticipated future financial demands. Financial
objectives might include things like setting aside money for an emergency fund and investing for your
child's college tuition.

3. Give the basic financial management decision.

• The basic financial management decisions are investment decisions, financing decisions, and dividend
decisions.
• Investment Decisions: This entail choosing where to put funds in order to get the best return. Consider a
business choosing between funding a brand-new project and expanding an already-existing one.
• Financing Decisions: This has to do with choosing the best funding sources and figuring out the right ratio of
debt to equity. For example, a business raising funds could decide to issue bonds or new shares.
• Dividend Decisions: This entails figuring out how much of the company's income will be kept at the
company and how much will be paid as dividends to shareholders. Consider a corporation choosing
whether to reinvest revenues back into the firm or distribute them to shareholders.