Financial Management means preparing, arranging, directing and managing the economic tasks such as procurement and utilization of funds regarding the enterprise. It indicates using management that is general to economic sourced elements of the enterprise.
Investment choices includes investment in fixed assets (called as money cost management). Investment in present assets will also be section of investment choices called as performing capital decisions.
Financial choices – They relate with the raising of finance from different resources that will rely on choice on sort of supply, amount of financing, price of funding and also the returns therefore.
Dividend decision – The finance manager has to just just take choice based on the web revenue circulation. Web earnings are often split into two:
- Dividend for shareholders- Dividend plus the price from it needs to be determined.
- Retained earnings- number of retained earnings has got to be finalized that will rely upon diversification and expansion plans associated with enterprise.
Goals of Financial Management
The monetary management is generally speaking focused on procurement, allocation and control of economic sources of a problem. The goals can be-
To make certain regular and supply that is adequate of towards the concern.
To make certain sufficient returns to your investors that may rely upon the capacity that is earning selling price of this share, objectives regarding the investors.
To guarantee maximum funds utilization. When the funds are procured, they must be found in optimum feasible method at minimum price.
To make sure security on investment, in other words, funds must be committed to safe ventures to ensure that rate that is adequate of is possible.
To prepare a capital that is sound should really be sound and reasonable structure of money in order for a stability is maintained between financial obligation and equity money.