Financial Management
About 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 the financial resources of the enterprise.
Functions of Financial Management
•
Estimation of capital requirements: A finance manager has to make estimation with regards to the capital requirements of the company. This
will depend upon expected costs and profits and future programs and
policies of concern. Estimations have to be made in an adequate manner
which increases earning capacity of the enterprise.
• Determination
of capital composition: Once the estimation has been made, the capital
structure has to be decided. This involves short-term and long-term
debt equity analysis. This will depend upon the proportion of equity
capital a company is possessing and additional funds which have to be
raised from outside parties.
• Choice of sources of funds
•
Investment of funds: The finance manager has to decide to allocate
funds into profitable ventures so that there is safety on investment and
regular returns are possible.
• Disposal of surplus: The net profits decision has to be made by the finance manager.
•
Management of cash: The finance manager has to make decisions with regard
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.
• Financial controls: The finance
manager has 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.
Why is Financial Management important?
This form of management is important for various reasons. Take a look at some of these reasons:
• Helps organizations in financial planning;
• Assists organizations in the planning and acquisition of funds;
• Helps organizations in effectively utilizing and allocating the funds received or acquired;
• Assists organizations in making critical financial decisions;
• Helps in improving the profitability of organizations;
• Increases the overall value of the firms or organizations;
• Provides economic stability;
• Encourages employees to save money, which helps them in personal financial planning.
Who should take the Financial Management Exam?
• Accounting or finance professionals
• Business owners or Entrepreneurs
• Anyone who wants to assess their financial management skills
• Accounting or finance managers and senior executives
• Financial consultants
• Professionals working in outsourced companies responsible for financial management
• Students
Financial Management Certification Course Outline
1. Overview
2. Financial Statements
3. Cash Flow
4. Fixed Capital Analysis
5. Capital Structure and Dividend Policy
6. Working Capital Analysis
7. Inventory Management
8. Cash Management Analysis
9. Foreign Exchange Orientation
10. Commodity Exchange
11. Financial Risk Management