financial management

1. ROORKEE INSTITUTE OF
TECHNOLOGY
MR. AKSHAT AGARWAL
DEEPTI
MBA 2 SEM

2. SIGNIFICANCE OF FINANCIAL
MANAGEMENT
1. FINANCE IS THE CONTROLLING FUNCTION : for all the business operation the finance is a
base . Every business activity , such as production , purchase , sales and marketing , manpower
planning involve the cash flow of funds and thus is controlled and monitored by the finance
function .
2. AID TO MANAGERIAL DECISION AREAS: financial management plays a vital role in policy and
managerial decision – making in a firm .
3. WEALTH MAXIMISATION : wealth maximization finance function aims to achieve maximum
profitability through sourcing of funds or capital at a lower cost .
4. FINANCIAL MANAGEMENT IS AN ANALYTICAL TOOL: finance management employs a variety
of scientific mathematical tools .

3. 5. ADMINISTRATIVE IN NATURE: now a days financial management has evolved to be more
controlling and supervising in nature .
6. FINANCE FUNCTION IS CENTRALISED : finance is one such business activity which is
controlled and administered centrally .

4. MEANING OF FINANCIAL MANAGER
The post of a human manager in a company is a key position
. A finance manager is a professional who is responsible for
the financial health of an organization .
They create accurate data analysis and advise senior
management on profit – maximizing ideas to ensure long –
term success.

5. 1. RISING FUNDS OF COMPANY FINANCE : the prime responsibility of a financial manager is to
estimate his/her company short term and long term requirements .
2.Taking maximum benefit from leverage : The financial manager has power to utilize leverage
both financial and operating to the maximum advantage of the company.
3. INTERNATIONAL FINANCIAL DECISION : financial manger of a company is expected to keep
him/her abreast of latest development .
4. INVESTMENT DECISION : financial manager plays an important role in capital budgeting
exercise by applying various available tools and techniques.
5. RISK MANAGEMENT : risk is the part of a project or venture undertaken by a company
although at times it is clearly visiting sometimes it is hidden .

6. ROLE OF FINNACE MANAGER
1. The financial manager is responsible for making decision that are
in the best interest of firm owners or maximize the owner’s wealth .
2. stakeholder is someone other than an owners. The managers ,
employees, suppliers , government , credit.
3. In this era of fast changing world, finance managers are always in
the lookout for the ways to enhance the value to their companies
through innovative financial activities .