Essentials of

Financial
Management
“Financial management provides a set of
principles and tools that help managers
accumulate and allocate capital in a firm.”

• What is Capital? Meaning

• What is the objective of financial and
management decisions?
Definition
“Principles of financial management
provides the skills/frameworks/tools/mindset
to understand the value implications of
business decisions.”
• Maximizing Shareholder Wealth
• Profit Maximization
• Optimal Capital Utilization
• Risk Management
• Liquidity Management
• Cost Control
• Long-Term Growth Goals
• Compliance and Ethical Standards
• Stakeholder Management
• Financial Planning
• Capital Budgeting
• Financial Reporting and Analysis
• Risk Management
• Capital Structure Management
• Working Capital Management
Finance
• Financial Risk Assessment Functions
• Corporate Finance
• Tax Planning
• Operations
• Marketing
• Human Resources
• Supply Chain and Procurement
• Information Technology (IT)
• Sales and Business Development Interface
• Legal and Compliance between
• Strategic Planning and Management
Finance and
other Business
Functions
“Financial Planning refers to the
process of setting goals, evaluating
resources, assessing current financial
status, and creating a strategy to
achieve future financial objectives. It
involves analyzing income, expenses,
Financial
assets, liabilities, and investments to Planning
make informed decisions that align
with one's financial goals.”
1. Establish Financial Objectives
2. Assess Current Financial Situation
3. Forecasting and Budgeting
4. Capital Budgeting
5. Risk Assessment and Management Steps in
6. Optimize Capital Structure Financial
7. Cash Flow Management
8. Financial Reporting and Analysis Planning
9. Tax Planning and Compliance
10. Monitoring and Review
11. External Audits and Compliance
12. Strategic Financial Management
• Economic Conditions
• Market Trends
• Regulatory Environment Factors
• Technological Developments
• Financial Risk Factors affecting
• Internal Factors Financial
• Capital Availability
• Global Events and Geopolitical Factors Plans
• Customer Behavior
• Environmental and Social Factors
• Currency Fluctuations
• Cost of Inputs