This document provides an overview of financial management. It discusses the scope and importance of financial management, including its objectives and functions. Financial management deals with procuring and effectively utilizing funds for business. The objectives of financial management have traditionally been profit maximization, but a modern approach emphasizes wealth or net present value maximization to improve shareholder value over time while considering risk. Key functions of a financial manager include forecasting financial requirements, making investment, dividend, and cash management decisions, engaging in financial negotiations, and performing market impact analysis.

1. An Overview of Financial Management

2. Session Layout Point 1 Case Study Point 2 Putting things In Perspective Point 3 Introduction & Meaning of Financial Management Point 4 Definitions Point 5 Scope & Importance of Financial Management Point 6 Objectives of Financial Management Point 7 Functions of Financial Manager

3. Putting things In Perspective Some of the forces that will affect financial management in the future. The place of finance in a firm’s organisation. The relationships between financial managers and their counterparts in the marketing, production, personnel depts. etc. The goals of a firm. The way financial mangers can contribute to the attainment of these goals.

5. ‘Management of Funds’ is an important aspect of financial management.

7. Procurement of Funds: Effective Utilisation of funds: Two main aspects of the finance Function:

8. Important in all types of business. Range from making decisions regarding plant expansion to choosing what types of securities to issue when financing expansion. Responsible for deciding the credit terms under which customers may buy, how much inventory the firm should carry, how much cash to keep in hand, whether to acquire other firms (merger analysis), and how much of the firms’ earnings to plow back into the business versus pay out as dividends. Scope & Importance:

9. Objectives of Financial Management

10. Business concern is also functionally mainly for the purpose of earning profit. Tool or technique to understand business efficiency. Traditional & narrow approach. Profit reduces risk of the business concern. Main source of finance. Meets the social needs also. Profit Maximisation: It Leads to exploiting workers and consumers. It creates immoral practices.

11. Its vague It ignores the time value of money It ignores risk Profit Maximisation objective consists of certain drawbacks: Profit Maximisation objective consists of certain advantages: Must for survival Essential for growth & development of business

12. Modern Approach The term wealth means shareholders wealth or the person who are involved in the business concern. Also known as value or net present worth maximisation. Superior to profit maximisation – to improve the wealth or value of shareholder. Considers both time & risk of the business concern. Ensures the economic interest of the society. Wealth Maximisation

13. Forecasting Financial Requirements Investment decisions Dividend decisions Cash management decisions Financial Negotiations Market Impact Analysis. Functions of Finance Manager: The position of FM is critical & analytical to solve various problems related to finance.

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