OBJECTIVES OF

FINANCIAL
MANAGEMENT
KEERTHANA S
16D054
OBJECTIVES OF FINANCE
 Profit maximization
- to understand the business efficiency
- main source of finance
- reduces the risk rate
- corruption and unfair trade practices
 Wealth maximization

- wealth: shareholders’ net present worth

- to increase the market value of shares
- better the performance, better the market value
of company’s shares
- wealth comes only if there is profit
OBJECTIVES CONTD..
 Proper estimation of total finance requirements
 Proper mobilization

- to collect finance from different sources

 Proper utilization of finance
 Maintaining proper cash flow

- to meet up with the day-to-day expenses

 Survival of company

- depends on the decisions taken

OBJECTIVES CONTD..
 Creating reserves
- for future growth & expansion
 Proper coordination
 Create goodwill

- to improve the image and reputation

 Increase efficiency

- all the departments are concerned

 Financial discipline

- to bring high returns and avoid wastage

OBJECTIVES CONTD..
 Reduce cost of capital
- prefer lower rate of interest
 Reduce operating risks

- to avoid high-risk projects

 Prepare capital structure

- to balance between owned and borrowed

finance