BUSINESS

FINANCE
Overview of Financial
Management
Objective of the lesson:

 Explain the major role of Financial Management and the different

individuals involved
 Define Finance and Financial Management
 Explain the major role of financial management and the different individuals
involved
 Identify the primary activities of financial manager
 Describe how the financial manager helps in achieving the goal of the
organization
FINANCE

The science and art of managing money

• can be in personal level or in business context
A process that includes raising money or resources
and allocating them effectively and efficiently to
achieve the firm’s goal and objectives
It includes financial management
FINANCIAL MANAGEMENT????
Financial Management

The study of investment, and the study of institutions and

market
Deals with the decisions that are supposed to maximize the
value of shareholder’s wealth
Decision-making process that includes planning, analysis,
utilization, and acquisition of funds in order to achieve the
desired goal of the business
Risk and return are part of managing a
business

How would you relate risk and return in managing a business?

Financial Management

Its aim is to make money and add value to the investors and
to the firm
Investors buy stocks because they want something in return
More investors will create more funds and more jobs
Things to consider to maximize
shareholders’ wealth

To gain profit, the business should make customers happy

They must treat employees well like customers to become more
productive and trust worthy
They should pay their financial obligation on time
They must also pay attention to the government and
environmental issues
They must comply with the government and legal requirements
Financial Management

 includes planning, organizing, controlling, and directing to

acquire and utilize the funds or resources effectively and
efficiently
 every activity of finance manager should be according to
plan. It should be organized, controlled, monitored and
evaluated.
Sources of Finance

 Internal Source
 does not increase the debts of the business
 profit, savings, sale of unwanted assets
 External Source
 provided by people or institutions outside the business that
creates debts and requires payments
 loans, investors
Activity 1:

Your mobile phone broke.

You believe that you badly
need it for your studies, but
your money is insufficient for
the repair fee. Where will you
get the fund needed.