What Is The Main Objective Of Financial Management?

What is the concept of financial management?

Financial management may be defined as the area or function in an organization which is concerned with profitability, expenses, cash and credit, so that the “organization may have the means to carry out its objective as satisfactorily as possible;” the latter often defined as maximizing the value of the firm for ….

What are the advantages of financial management?

Advantages of Financial ManagementBetter decision making. Financial management facilitates better decision making. … Transparency of Information. … Finance Control. … Enhances Managerial Efficiency. … Profit Maximization and Wealth Maximization. … Determines Adequate Capital. … Avoids Debts. … Costly.More items…

What are the three main functions of financial management?

The financial manager’s responsibilities include financial planning, investing (spending money), and financing (raising money). Maximizing the value of the firm is the main goal of the financial manager, whose decisions often have long-term effects.

What are the principles of financial management?

10 Basic Principles of Financial ManagementOrganize Your Finances. Organizing your finances is the first step to creating wealth. … Spend Less Than You Earn. … Put Your Money to Work. … Limit Debt to Income-Producing Assets. … Continuously Educate Yourself. … Understand Risk. … Diversification Is Not Just for Investments. … Maximize Your Employment Benefits.More items…•

What are the aims and objectives of financial management?

The primary objectives of financial management are: Attempting to reduce the cost of finance. Ensuring sufficient availability of funds. Also, dealing with the planning, organizing, and controlling of financial activities like the procurement and utilization of funds.

What is the objective of public financial management?

Campos and Pradhani identified three objectives of fiscal management: aggregate fiscal discipline; strategic prioritisation of expenditure and technical efficiency. Allen Schickii has identified three different objectives of public budgeting: Strategic Planning; Management Control and Operational Control.

What is objective of financial management and scope?

– The primary objective of financial management includes procurement, allocation, and control of funds for an organisation. Proper financial management also allows an adequate utilisation of funds, ensuring best returns as well as investment’s safety. 2. Explain the Scope of Finance Functions.

What are the 5 performance objectives?

The key to having good all-round performance is five performance objectives: quality, speed, dependability, flexibility and cost.

What are the 6 principles of finance?

There are six basic principles of finance, these are:Principles of risk and return.Time value of money.Cash flow principle.Profitability and liquidity.Principles of diversity.Hedging principle.

What are the four steps in the financial management cycle?

Effective public sector financial management and service delivery is a continuous process of planning, implementation, evaluation, audit and improvement based on the outcomes.

What is the scope of financial management?

The other scope of financial management also includes the acquisition of funds, gathering funds for the company from different sources, assessment and evaluation of financial plans and policies, allocation of funds, use of funds to buy fixed and current assets, appropriation of funds, dividing and distribution of …

What are the objectives of financial management?

Financial Management means planning, organizing, directing and controlling the financial activities such as procurement and utilization of funds of the enterprise. It means applying general management principles to financial resources of the enterprise. Main aim of any kind of economic activity is earning profit.