Fin200 Week 1 Assignment

FIN200-r3 Week 1 Work 1

Write a 200- to 300-word paper describing the goals of financial management. The description should include how earnings are valued, how shareholder wealth can be maximized, and how management decisions affect stockholder wealth.

The goals of financial management is to make money or add value for the owners. The financial manager in a corporation makes decisions for the stockholders of the firm. The financial manager acts in the shareholders' best interests by making decisions that increase the value of the stock. The goal of financial management is to maximize the current value per share of the existing stock. It involves applying the basic principles of management in financial activities such as purchases, sales, capital expansion, inventory valuation, financial reporting, and profit distribution. Therefore, the primary goals of financial management dwell on both short-term and long-term activities that seek to maximize value creation from scarce financial resources. Timely dissemination of monthly, quarterly and annual financial information to internal and external stakeholders is a significant goal of financial management. It ensures that financial information is prepared in accordance with accounting principles and International Financial Reporting Standards. This provides internal stakeholders that is, owners and employees with reliable information on the performance and profitability of the business. The financial reports furnish suppliers with the information they require to determine the stability of the business, and enable the government to examine the tax obligations of the business. Financial plans and forecasts aim at facilitating efficiency in the current and future activities of the business. The planning process seeks to match the organization’s operational and investment activities to its overall cash flow capabilities. Current and future cash flow projections determine the scope of short-term and long-term plans of the...