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FINANCIAL MANAGEMENT:

13.Financial management means planning, organizing, directing and controlling the financial activities
such as procurement and utilization of funds of the enterprise.

It is an activity which is concerned with acquisition and conservation of capital funds in meeting
financial need an overall objectives of business organisation.

It means applying general management principles to financial resources of the enterprise.

14.The main objectives of financial management is wealth maximization of shareholder’s wealth.

To ensure regular and adequate supply of funds to the concern.

To ensure adequate returns to the shareholders.

To ensure optimum funds utilization. Once the funds are procured, they should be utilized in maximum
possible way at least cost.

15.Financial planning: Management need to ensure that enough funding is available at the right time to
meet the needs of the business.

(а) The short term funding may be needed to invest in equipment and stocks, pay employees and fund
sales made on credit.

(b) The medium and long term funding may be required for significant additions to the productive
capacity of the business or to make acquisitions.

16.Financial control: It ensures that the business is meeting its goals and objectives. Financial control
addresses questions such as:

(a) Are assets being used efficiently?

(b) Are the business assets secure?

(c) Does management act in the best interest of shareholders and in accordance with business rules?

17.Financial decision-making: The key aspects of financial decision-making relate to investment,
financing and dividends. For example, it is possible to raise finance from selling new shares, borrowing
from banks or taking credit from suppliers.

(a) A key financing decision is whether profits earned by the business should be retained or distributed
to share¬holders through dividends.

(b) If dividends are too high, the business may be starved of funding to reinvest in growing revenues and
profits further.