FINANCIAL MANAGEMENT

Financial management means planning, organizing, directing and controlling the financial activities such as procurement and utilization of funds of the enterprise. It means applying general management principles to financial resources of the enterprise.

Objectives :
• To obtain regular and adequate supply of funds to the concern.
• To obtain adequate returns to the shareholders which will depend upon the earning capacity, market price of the share, expectations of the shareholders.
• To obtain optimum funds utilization. Once the funds are procured, they should be utilized in maximum possible way at least cost.

Functions : 
• Financial control, We need not only to plan, procure and utilize the funds but he also has to exercise control over finances. This can be done through many techniques like ratio analysis, financial forecasting, cost and profit control, etc.
• Management of cash, We have to make decisions with regards to cash management. Cash is required for many purposes like payment of wages and salaries, payment of electricity and water bills, payment to creditors, meeting current liabilities,maintenance of enough stock, purchase of raw materials, etc.