Financial management refers to the efficient and effective management of money (funds) in

such a manner as to accomplish the objectives of the organization. It is the specialized function
directly associated with the top management. The significance of this function is not seen in the
'Line' but also in the capacity of 'Staff' in overall of a company. It has been defined differently by
different experts in the field.

The term typically applies to an organization or company's financial strategy, while personal
finance or financial life managementrefers to an individual's management strategy. It includes
how to raise the capital and how to allocate capital, i.e. capital budgeting. Not only for long term
budgeting, but also how to allocate the short term resources like current liabilities. It also deals
with the dividend policies of the share holders.

"Planning is an inextricable dimension of financial management. The term financial

management connotes that funds flows are directed according to some plan." By James Van
Horne[1]

"Financial management is that activity of management which is concerned with the

planning, procuring and controlling of the firm's financial resources. " By Deepika &Maya
Rani

Financial Management is the Operational Activity of a business that is responsible for

obtaining and effectively utilizing the funds necessary for efficient operation. By Joseph
Massie

Business finance deals primarily with rising administering and disbursing funds by
privately owned business units operating in non-financial fields of industry. By Kuldeep Roy

Financial Management is an area of financial decision making, harmonizing individual

motives and enterprise goals." -By Weston and Brigham

Financial management is the area of business management devoted to a judicious use

of capital and a careful selection of sources of capital in order to enable a business firm to
move in the direction of reaching its goals. by J.F.Bradlery

Financial management is the application of the planning and control function to the
finance function. by K.D. Willson

Financial management may be defined as that area or set of administrative function in

an organization which relate with arrangement of cash and credit so that organization may
have the means to carry out its objective as satisfactorily as possible." - by Howard & Opton.
[2]
 Business finance can be broadly defined as the activity concerned with planning, raising,
controlling and administering of funds and in the business. by H.G Gathman & H.E Dougall

Financial management is a body of business concerned with the efficient and effective
use of either equity capital, borrowed cash or any other business funds as well as taking the
right decision for profit maximization and value addition of an entity.- Kepher Petra; Kisii
University.

Finance management not only for the business, but also for every expenses. Like its for
the home base expenses or the government expenses. The government also need to
manage the finance for the develop of the country and the household also need to manage
their expenses properly - By Vinod Verma

"Financial management refers to proper and efficient use of money" and it plays a significant role
in analyzing to invest in profitable business enterprise..Return on Investment must be greater
than the invested amount..By Ibrar Alam.

Objectives of Financial Management[edit]

Profit maximization occurs when marginal cost is equal to marginal revenue. This is the
main objective of Financial Management.

Wealth maximization means maximization of shareholders' wealth. It is an advanced goal

compared to profit maximization.[3]

Survival of company is an important consideration when the financial manager makes

any financial decisions. One incorrect decision may lead company to be bankrupt.

Maintaining proper cash flow is a short run objective of financial management. It is

necessary for operations to pay the day-to-day expenses e.g. raw material, electricity bills,
wages, rent etc. A good cash flow ensures the survival of company.

Minimization on capital cost in financial management can help operations gain more
profit.

Scope of Financial Management[edit]

Estimating the Requirement of Funds: Businesses make forecast on funds needed in
both short run and long run, hence, they can improve the efficiency of funding. The
estimation is based on the budget e.g. sales budget, production budget.

Determining the Capital Structure: Capital structure is how a firm finances its overall
operations and growth by using different sources of funds. [4] Once the requirement of funds
 has estimated, the financial manager should decide the mix of debt and equity and also
types of debt.

Investment Fund: A good investment plan can bring businesses huge returns.

Financial Management for Start Up[edit]

For new enterprises, it is important to make a good estimation on costs, sales. [5] Consideration on
appropriate length sources of finances can help businesses avoid the cash flow problems even
the failure of setting up. There are fixed and current sides of assets balance sheet. Fixed
assets refers to assets that cannot be converted into cash easily, like plant, property, equipment
etc.[6] A current asset is an item on an entity's balance sheet that is either cash, a cash
equivalent, or which can be converted into cash within one year.[7] It is not easy for start ups to
forecast the current asset, because there are changes in receivables and payables. [8]

Managerial finance, a branch of finance concerned with the managerial significance of

finance techniques

Corporate finance, a branch of finance concerned with monetary resource allocations

made by corporations

Financial management for IT services, financial management of IT assets and resources

Financial Planning Association, an organization for finance and economics students and
professionals

Financial Management Service, a bureau of the U.S. Treasury which provides financial
services for the government[9]

Financial planner

Finance