FINANCIAL MANAGEMENT

 INTRODUCTION AND CONCEPT

 Procurement (raising)of funds
• Determination the requirement of funds
• Selecting the avenues to raise the funds
• Allocation of funds
• Deciding the requirement of each department
• Deciding the requirement of each department effective
utilization of funds
MEANING OF FINANCIAL MANAGEMENT

Financial management is related with proper

utilization of funds and aims at maximization of
profits and minimization of costs. It helps the
growth of firm by determining the cash and cash
equivalents of the company .
 As a Finance is the life blood of the company ̦ it
is related with the anticipation ̦procurement and
allocation of funds
Definitions of Financial Management
According to the Guthmann and dougall
“Financial Management is not only acquiring the funds
but allocation the funds in such a manner so to
maximize the profit or achieve the organizational
goal”.

According to Howard and Upton “Financial

Management involves the application of general
management principles to a particular financial
operation”
Nature of Finance or Finance Function
Finance function is related to overall management of an of an
organization
Finance function is related to other functions of
management.
Finance function is necessary for all types of business
organizations.
Finance function is important for the survival and growth of a
firm.
Finance function is organized differently in different
organizations.
Finance function is different from accounting function.
Finance function is influenced both by external needs and
management considerations.
Scope of Financial Management

 Financial planning
 Forecasting of capital receipt and disbursements.
 Raising of funds.
 Use and allocation of funds.
 Management of surplus.
 Financial control.
Function of Finance
 Financial decision
Deciding the capital mix (Debt\ Equity).

 Dividend decision
Retention of profit and payment of dividend.

 Investment decision
Long term (capital budgeting).
Short term(working capital management).
Nature or Characteristics of Financial
Management
• Management of money.
• Financial planning and control.
• Determination of business success.
• Focus on decision making.
• Centralized in nature.
• Continuous administrative function.
• Multidisciplinary.
•
Importance of Financial management
Successful promotion.
Smooth running of business.
Co-ordination of functional activities.
Decision making.
Determinant of business success.
Solutions of financial problems.
THANK YOU