Submitted by: Submitted by abkushal
Views: 175
Words: 983
Pages: 4
Category: Business and Industry
Date Submitted: 12/16/2013 10:17 AM
Managerial finance is the branch of finance that concerns itself with the managerial significance of finance techniques. It is focused on assessment rather than technique. Managerial finance is an interdisciplinary approach that borrows from both managerial accounting and corporate finance.
Sound financial management creates value and organizational agility through the allocation of scarce resources amongst competing business opportunities. It is an aid to the implementation and monitoring of business strategies and helps achieve business objectives.
The managerial Finance functions are:
to evaluate the effort, from the financial point of view, of all the actions that are about to be made in a given administration period;
- to provide, at the right moment, in the structure and the quality conditions claimed by necessities, the capital, at the lowest possible cost;
- to follow how the capital is used;
- to influence the decision factors in each performance centre in order to insure an efficient usage of all funds attracted in the circuit;
- to insure and maintain the financial balance according to the company’s needs;
- to try to obtain the anticipated financial result and to distribute it on destinations
The importance of the financial management in modern organizations
If we were to take into consideration certain financial objectives, we might come up with ideas such as: survival; avoiding the financial crises or bankruptcy; overcoming competition; maximizing sales or market rate; minimizing costs; maximizing profits; maintaining an earnings’ sustained growth. Each of these possibilities shows problems that have to be solved by the financial management. If we take each mentioned idea, we might say that, at first sight, the company does not need a financial manager. For example, the sales’ increase can be achieved by increasing the loan period offered to the clients. To minimize costs, the company can reduce the research volume of the...