Financial Management is the backbone of every business whether small or vast. The success or failure of a business depends upon the management of finances. It includes planning, organizing, controlling and directing the various activities related to finance. At MIT School of Distance Education (MIT-SDE), we offer distance MBA equivalent PGDM and PGDBA courses that are a mix of theoretical and practical approach. So, if you want to enhance your employability, then pursue correspondence MBA courses from MIT-SDE. To know more information you can visit here: https://www.mitsde.com/Blog/fundamentals-of-financial-management/

1. MIT School of Distance Education
Fundamentals of Financial Management

2. Financial Management is the backbone of every business
whether small or vast. The success or failure of a business
depends upon the management of finances. However, the
term ‘Financial Management’ is not limited to the procurement
or allocation of money. It includes planning, organizing,
controlling and directing the various activities related to
finance.

3. Elements of Financial Management
Different elements play pivotal roles in the functioning of
any management. Let’s have a brief look at the basic
elements of financial management which affects its core
functioning.
Investment Decisions: Investment decision is the primary
element of financial management. It involves decisions
related to investment in current and fixed assets. It is also
termed as working capital decisions and capital budgeting.

4. Dividend Decisions: Proper distribution of profits among
the shareholders and the management of the company is
essential. The decisions regarding the profit division are
taken by the finance manager. Usually, the dividend rate is
decided for the shareholders and some profits are retained
in the company for its growth.

5. Financial Decisions: There are various circumstances
under which a company would require raising of finance
either from internal or external factors. Thus, the finance
manager has to come up with the different decisions for
raising finances depending upon the source, cost or the
period of financing.

6. Functions of Financial Management
Choice of sources of funds: There are various choices for a
company when it comes to raising funds. It can either be
through shares & debentures and loan from public deposits or
different financial institutions.
The financial manager has to choose wisely while selecting the
source of funds. He should give preference to internal
sources.

7. Management of cash: Cash management is very essential as
it ensures constant working capital in the company. Various
miscellaneous payments, remunerations, current liabilities, etc
should usually be paid in cash by the finance manager.

8. Disposal of Surplus: The profit earned by the company needs
to be divided among the shareholders in the form of a dividend
on their shares. Thus, the finance manager declares the
dividend rate and after distributing the profits, the remaining
part is retained by the company which is utilized for its
expansion.

9. Finance Management aims at the successful run of the
business by managing the finances. There are certain
objectives of financial management which are listed below:
•Ensure regular supply of funds in the company.
•Ensure optimum utilization of funds so as to gain maximum
benefit in minimum cost.
Objectives of Financial Management

10. • Ensure that the shareholders receive a regular return on their
money invested. This is dependent upon the market price of
the share and profit earnings of the company.
• Maintain a proper balance between the company’s debt and
equity.

11. So, these were the fundamentals of financial management.
Every finance professional must be aware of these basics in
order to plan and implement effective financial management in
an organization. At MIT School of Distance Education (MIT-
SDE), we train the future managers and impart necessary
managerial skills. MITSDE offer PG Diploma in Financial
Services Correspondence Courses.

12. We offer distance MBA equivalent PGDM and PGDBA
courses that are a mix of theoretical and practical approach.
We also conduct webinars to build concepts and skills of the
students. Our candidates are immediately absorbed in the
industry after course completion. So, if you want to enhance
your employability, then pursue correspondence
MBA courses from MIT-SDE.

13. THANK YOU