Introduction to Financial Management

3. Finance is the lifeline of any business. However, finances, like most
other resources, are always limited. On the other hand, wants are always
unlimited. Therefore, it is important for a business to manage its
finances efficiently. As an introduction to financial management, in this
Module, the study will look at the Objectives, scope, and significance of
financial management, along with financial decisions and planning.

4. • Finance is regarded as the life blood of a business
enterprise. Without adequate finance no business
can survive or accomplish its objectives.
• In general, finance may be defined as the
provision of money at the time it is wanted. Thus
finance refers to making provision of money at the
time when it is required.
• Business finance is that business activity which is
concerned with the acquisition and conservation
of funds in meeting financial needs and overall
objectives of a business enterprise. In other words,
it refers to the process of raising, providing and
administering of money used in a business
concern.

6. Financial Management means
planning, organizing, directing and
controlling the financial activities such
as procurement and utilization of funds
of the enterprise. It means applying
general management principles for
financial resources of the enterprise.

7. •It refers to the efficient
and effective
management of money
(funds) in such a
manner as to accomplish
the objectives of the
organization

8. “Financial management is the operational
activity of a business that is responsible for
obtaining and effectively utilizing the funds
necessary for efficient operations” J.F Bradley
“Financial management is concerned
with the efficient use of an important
economic resource, namely capital
funds” Solomon

9. Scope of Financial Management
1.Estimation of funds
2.Selecting sources of finance
3.Allovcation of funds among projects
4.Cash management
5.Determining optimal capital structure
6.Finance control
7.Management of Retained earnings