STFM Exam Prelim study Questions with Correct Answers

STFM Exam Prelim study Questions with
Correct Answers
Financial Management

It involves the application of general management principles to the financial resources of the

enterprise.

• Maximizing profits

• Tracking liquidity and cash flow

• Ensuring compliance

• Developing financial scenarios

• Manage relationships

Key Elements of Financial

Management

• Profit Maximization

• Wealth Maximization

• Survival

• Growth

• Maintaining Liquidity

GOALS OF FINANCIAL MANAGEMENT

WEALTH

MAXIMIZATION

, It focuses on the long-term financial health of the company and is more comprehensive than just

earning profit.

ENSURING

COMPLIANCE

This helps avoid penalties, legal trouble, or closure.

Planning

Budgeting

Managing and assessing risk

Procedure

SCOPE OF FINANCIAL MANAGEMENT

• CAPITAL BUDGETING

• CAPITAL STRUCTURE

• WORKING CAPITAL

FUNCTIONS OF FINANCIAL MANAGEMENT

CAPITAL

BUDGETING

is about deciding where to invest the company's long-term funds to generate future profits.

WORKING CAPITAL

It ensures the business has enough liquidity to run smoothly.