Financial Management
2.1.1 Definition of Financial Management
Financial management according to Sutrisno (2012: 3), is as follows:
"Financial management can be defined as all company activities related to efforts to obtain
company funds at a low cost and efforts to use and allocate these funds efficiently".
Meanwhile, according to Sartono (2012: 6), financial management is:
"Financial management can be interpreted as fund management both related to allocating funds in
various forms of investment effectively and efforts to raise funds to finance investment or spending
efficiently".
Based on the above definition, it can be concluded that financial management is a company activity
related to efforts to raise funds and allocate funds effectively and efficiently.
2.1.2 Purpose of Financial Management
Kamaludin (2011) states that the normative objective in financial management is to maximize
company value or the prosperity of shareholders.
Meanwhile, according to Sutrisno (2012: 4), the objectives of financial management are as follows:
"The main objective of financial management is to increase the prosperity of shareholders or
owners. In financial management there are three main functions of financial management, namely:
investment decisions, funding decisions and dividend decisions ".
Based on the above definition, it can be concluded that the purpose of financial management is to
increase the prosperity of shareholders or company owners and maximize company value.
2.1.3 Financial Management Functions
According to Sutrisno (2012), the financial management function consists of three main decisions
that must be made by a company: investment decisions, funding decisions, and dividend policies.
Each decision must lead to what the company expects. The combination of these three functions
will maximize the value of the company. The three financial decisions are applied in daily activities
to earn profits and achieve company goals. The following are the three functions of financial
management.
2.1.1 Definition of Financial Management
Financial management according to Sutrisno (2012: 3), is as follows:
"Financial management can be defined as all company activities related to efforts to obtain
company funds at a low cost and efforts to use and allocate these funds efficiently".
Meanwhile, according to Sartono (2012: 6), financial management is:
"Financial management can be interpreted as fund management both related to allocating funds in
various forms of investment effectively and efforts to raise funds to finance investment or spending
efficiently".
Based on the above definition, it can be concluded that financial management is a company activity
related to efforts to raise funds and allocate funds effectively and efficiently.
2.1.2 Purpose of Financial Management
Kamaludin (2011) states that the normative objective in financial management is to maximize
company value or the prosperity of shareholders.
Meanwhile, according to Sutrisno (2012: 4), the objectives of financial management are as follows:
"The main objective of financial management is to increase the prosperity of shareholders or
owners. In financial management there are three main functions of financial management, namely:
investment decisions, funding decisions and dividend decisions ".
Based on the above definition, it can be concluded that the purpose of financial management is to
increase the prosperity of shareholders or company owners and maximize company value.
2.1.3 Financial Management Functions
According to Sutrisno (2012), the financial management function consists of three main decisions
that must be made by a company: investment decisions, funding decisions, and dividend policies.
Each decision must lead to what the company expects. The combination of these three functions
will maximize the value of the company. The three financial decisions are applied in daily activities
to earn profits and achieve company goals. The following are the three functions of financial
management.
