Financial management is pivotal for the smooth functioning of an organization. It involves planning, organizing, directing, and controlling financial activities such as procuring and utilizing funds. The key functions of financial management include financial planning and forecasting, determining the optimal capital structure, investing funds productively, maintaining proper liquidity, disposing of surplus assets, and establishing financial controls. Effective financial management helps ensure operational efficiency, build adequate reserves, maximize profitability, and fulfill the goals and vision of the organization.

1. FINANCIAL MANAGEMENT.
WHY IS IT SO PIVOTAL IN THE
SMOOTH FUNCTIONING OF THE
ORGANIZATION
By:- Virendra Bodele
Dt:-04-11-2019

2. Meaning of Financial Management
• 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 to
financial resources of the enterprise.

3. Financial Management is vital to any company, whether
or not tiny or huge. it's just like the lifeline of the
business. it's also an important activity that has to be
performed in any organization.
However, financial management entails the method of
designing, organizing, observance and conjointly
dominant the financial resources of a corporation. the
concept for doing such is to be able to succeed the vision
or goals of the corporate at the stipulated timeframe.
Financial Management could be a regular apply during a
business surroundings. It involves managing a company’s
financial resources to make sure there's very little or no
wastage. It controls each single issue relating to the
company’s financial activities which has the procurance
of funds, use of funds, payments, accounting, risk
assessment and alternative things that area unit
associated with finances.

4. And that is one in all the explanations it's thought-
about to be an integral a part of the company as a
result of, while not correct use of funds, the
business will go down. it'd additionally not have
what it takes to hold out production or activities.
The general principles of management also are
applied to the monetary management of the
corporate too. however the most focus shouldn’t be
to make principles or department to manage the
finances of the business.
They must be established to follow the
simplest practices, use the desired financial
management tools and conjointly deploy the
correct ways to attenuate price and guarantee
production or business activities function smoothly.

5. Definition
• The most popular and acceptable definition of
financial management as given by S.C.Kuchal
is that “Financial Management deals with
procurement of funds and their effective
utilization in the business”.
• Weston and Brigham : Financial Management
“is an area of financial decision-making,
harmonizing individual motives and enterprise
goals”.

6. IMPORTANT
• It helps in future cash flow
• It considered the time value of money.
• This concept allows the dividend policy of the
• company to have its effect of the market value
the equity shares.
• It also contributes to the maximization of
• other objectives of financial management.
• Cash flows from projects subject to greater
risks are discounted at a higher discount rate

7. Objectives
• By increasing the sales and there by increasing
the revenues.
• y reducing the cost of production through
• efficient use of the resources.
• By making judicious choice of funds.
• By minimizing risk

8. Objectives
• Ensuring maximum operational efficiency
through planning, directing and controlling of
the utilization of the funds.
• Enforcing financial discipline in the
organization in the use of financial resources.
• Building up of adequate reserves for financing
growth of expansion.
• Ensuring a fair return to the shareholders on
their investments.

9. Role
• Business forecasting
• Determination of financial objectives, financial
• polices and operational procedures
• Estimation of the capital requirements of the
• business
• Designing the capital structure
• Determination of the proper sources of
• finance

10. Role
• Investment decision
• Ensuring supply of required funds
• Controlling the use of funds
• Profit planning
• Disposal of surplus or profit, or dividend
• decision
• Management of working capital
• Helping in valuation decisions

11. Role
• Wealth maximization
• Legal responsibilities
• Designing suitable system of providing
• information
• Keeping track of stock exchange quotations
• Co-ordination of the activities of subordinates

12. Role
• Responsibilities to shareholders
• Responsibilities to employees
• Responsibilities to various creditors
• Responsibilities to customers
• Responsibilities to the society

13. Functions of Financial Management
• Financial Planning and Forecasting
It is the financial manager’s responsibility to
set up and estimate the business’s monetary
desires. He must offer details relating to the
number of cash that will be needed to get
completely different assets for the company.
The management through the monetary
manager must grasp what they have to pay on
assets and stuck assets for the business too.
Another important duty of the monetary manager
is to create artistic movement plans for funds that
the corporate would want. and therefore the
manner during which the funds are accomplished
and used is additionally of utmost importance to
the financial manager.

14. Functions of Financial Management
• Determination of capital composition
Once the Planning and Forecasting have
been made, the capital structure have to be
decided. The mix of debt and equity used to
finance the company’s future profitable
investment opportunities is referred to as capital
structure.

15. Functions of Financial Management
• 3. Fund Investment
The financial manager has got to make
sure that funds created obtainable to the
business are used adequately to grow the
business. the price of effort the same fund and
value of the returns have to be compelled to be
compared and balanced. The financial manager
additionally has to explore the channels of the
business that's yielding higher returns and
improve them.

16. Functions of Financial Management
• Maintain Proper Liquidity
– Cash is that the best supply for maintaining
liquidity. The business needs it to shop for raw
materials, pay salaries and tackle alternative
financial wants of the company. However, the
financial manager should verify if there's a
requirement for quick assets. He conjointly should
organize these assets during a manner that the
business won’t expertise inadequacy of funds.

17. Functions of Financial Management
• Disposal of Surplus
Selling surplus assets and investing in more
productive ways will increase profitability and
therefore increase the ROCE.

18. Functions of Financial Management
• 6. Financial Controls
Financial control is also construed because
the analysis of a company’s actual results,
approached from totally views at different
times, compared to its short, medium and long-
run objectives and business plans.

19. Conclusion
• The financial management is a hot topic in the
business world because of the importance of
finance to the business. The reason for
establishing a company is to make a profit and
also run for many years. However, it’s the
financial manager’s responsibility that the
finances of the company are used adequately.
• If all this thing you want proper and smooth you
should apply financial management . This all
things is very important to ran any company and
financial management is fundamental function to
do or control all this .

20. Thank you