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Title: TYPES, FUNCTIONS, AND OBJECTIVES OF FINANCIAL MANAGEMENT
Description: Financial management is the practice of handling a company's finances in a way that allows it to be successful and compliant with regulations. That takes both a high-level plan and boots-on-the-ground execution.
Description: Financial management is the practice of handling a company's finances in a way that allows it to be successful and compliant with regulations. That takes both a high-level plan and boots-on-the-ground execution.
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TYPES, FUNCTIONS, AND OBJECTIVES OF FINANCIAL MANAGEMENT
Financial management refers to the diplomatic planning, organizing, directing, and
supervising of financial undertakings in an organization
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A finance manager is appointed to
control finance and manage its resources within an industry
...
Maximize profits by giving insights on for example, ascending costs of raw materials
that might trigger a hike in the selling value
...
Secure adequate returns to the shareholders which will depend upon the earning
capability, the market value of the share expectations of the shareholders etc
...
Track liquidity and cash flow to ensure the organization has enough money on hand to
meet its requirements
...
Ensure optimum funds utilization
...
e
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f
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There should be a sound composition of capital so that
a balance is maintained between debt and equity capital
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This depends upon the policies of the firm
regarding required expenses and profits
...
Determining capital structure - once the need for capital funds has been decided, a decision
regarding the type and proportion of various sources of funds has to be taken
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This is done to obtain the minimum cost of capital and maximize
shareholders wealth
...
The management can raise
finance from different sources like equity investors, preference shareholders, debenture
holders, banks and other financial associations, public deposits etc
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Hence, the financial manager needs to invest the
organization's funds in secure and effective ventures
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It might involve consultation with creditors and financial associations, issuer of
prospectus etc
...
Allocation of profits - once the organization has received a decent amount of net profit, it is
the financial managers duty to allocate it efficiently
...
Financial control - not only does the financial managers have to plan, organize, and get
funds but he also has to manage and evaluate the firm's finances in the short term and the
long term
...
Types of Financial Management
There are three types of financial management:
1
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These management teams are likewise answerable for raising funds and investing funds
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Capital Structure
It figures out how to pay for operations and growth
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A company might also seek funding
from a private investment company, consider selling assets, or selling capital where
applicable
...
3
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The basic task of working
capital management is to assure the organization
dependably keeps up adequate liquid cash to meet its short-term debts and operational cost
...
Title: TYPES, FUNCTIONS, AND OBJECTIVES OF FINANCIAL MANAGEMENT
Description: Financial management is the practice of handling a company's finances in a way that allows it to be successful and compliant with regulations. That takes both a high-level plan and boots-on-the-ground execution.
Description: Financial management is the practice of handling a company's finances in a way that allows it to be successful and compliant with regulations. That takes both a high-level plan and boots-on-the-ground execution.