Financial Management

FIN MN 301

Financial Management

What is Financial Management?

Financial management refers to the efficient and effective management of money (funds) in such a manner as to accomplish the objectives of the organization. It is the specialized function directly associated with the top management. The significance of this function is not seen in the 'Line' but also in the capacity of 'Staff' in overall of a company. It has been defined differently by different experts in the field.

The term typically applies to an organization or company's financial strategy, while personal finance or financial life management refers to an individual's management strategy. It includes how to raise the capital and how to allocate capital, i.e. capital budgeting. Not only for long term budgeting, but also how to allocate the short term resources like current liabilities. It also deals with the dividend policies of the share holders.

Definition of Financial Management

* “Financial Management is the Operational Activity of a business that is responsible for obtaining and effectively utilizing the funds necessary for efficient operation.” byJoseph Massie

* “Business finance deals primarily with rising administering and disbursing funds by privately owned business units operating in non-financial fields of industry.”– by Kuldeep Roy

* “Financial Management is an area of financial decision making, harmonizing individual motives and enterprise goals.” By Weston and Brigham

* “Financial management is the area of business management devoted to a judicious use of capital and a careful selection of sources of capital in order to enable a business firm to move in the direction of reaching its goals.” – by J.F.Bradlery

* “Financial management is the application of the planning and control function to the finance function.” – by K.D. Willson

* “Financial management may be defined as that area or set of administrative function in an organization which relate with...