Financial Management – Introduction (Full Chapter Notes)
1. Meaning of Financial Management
Financial control is the procedure of making plans, organizing, directing, and controlling the
monetary sources of an agency to acquire its goals efficaciously.
It involves coping with each the assets of budget and their right usage.
2. Importance of Financial Management
Financial management guarantees the survival, increase, and profitability of a enterprise.
It helps in selection-making related to investments, financing, and dividend distribution.
It keeps a balance among profitability and liquidity.
3. Objectives of Financial Management
The primary objective is wealth maximization of shareholders.
Profit maximization is a brief-term goal but wealth maximization is a protracted-time period goal.
Ensuring enough availability of price range for business operations.
Ensuring most appropriate usage of financial resources.
Maintaining financial subject within the corporation.
4. Functions of Financial Management
Estimation of financial requirements of the commercial enterprise.
Determining the resources of budget – equity, debt, retained profits, and many others.
Investment selection – finding out wherein to make investments price range for max go back.
Financing choice – figuring out the capital structure (debt-fairness mix).
Dividend selection – determining how a good deal income to distribute and how much to retain.
Liquidity control – making sure sufficient coins flow to meet responsibilities.
Risk control – controlling financial dangers thru hedging, diversification, and coverage.
5. Scope of Financial Management
Financial making plans – making ready a economic roadmap for the business.
Capital budgeting – evaluating funding initiatives for lengthy-time period advantages.
Capital structure – identifying the proportion of debt and equity.
Working capital control
1. Meaning of Financial Management
Financial control is the procedure of making plans, organizing, directing, and controlling the
monetary sources of an agency to acquire its goals efficaciously.
It involves coping with each the assets of budget and their right usage.
2. Importance of Financial Management
Financial management guarantees the survival, increase, and profitability of a enterprise.
It helps in selection-making related to investments, financing, and dividend distribution.
It keeps a balance among profitability and liquidity.
3. Objectives of Financial Management
The primary objective is wealth maximization of shareholders.
Profit maximization is a brief-term goal but wealth maximization is a protracted-time period goal.
Ensuring enough availability of price range for business operations.
Ensuring most appropriate usage of financial resources.
Maintaining financial subject within the corporation.
4. Functions of Financial Management
Estimation of financial requirements of the commercial enterprise.
Determining the resources of budget – equity, debt, retained profits, and many others.
Investment selection – finding out wherein to make investments price range for max go back.
Financing choice – figuring out the capital structure (debt-fairness mix).
Dividend selection – determining how a good deal income to distribute and how much to retain.
Liquidity control – making sure sufficient coins flow to meet responsibilities.
Risk control – controlling financial dangers thru hedging, diversification, and coverage.
5. Scope of Financial Management
Financial making plans – making ready a economic roadmap for the business.
Capital budgeting – evaluating funding initiatives for lengthy-time period advantages.
Capital structure – identifying the proportion of debt and equity.
Working capital control
