Financial management involves the flow of funds in a business and making financial decisions to attain organizational goals. It includes raising funds from various sources and effectively utilizing those funds. The scope of financial management has expanded from traditional raising and procurement of funds to also include utilization of funds and addressing financial problems. Key aspects of financial management are profit/wealth maximization, the finance function which encompasses investment, financing, and dividend decisions.

1. Financial
Manageme
nt

3. Objectives
To helps the students to
have basic knowledge in
Financial Management
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4. Content
Meaning and Definition of Financial
Management.
Scope of Financial Management.
Profit Vs Wealth Maximization.
Finance Function.
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5. Introduction
 Finance is the life blood and nerve centre of a
business.
 It is needed for smooth running of business In
order to manage finance, new management
discipline was conceived.
 Such discipline is known as Financial
Management

6. Meaning and Definition
 It refers to the management to flow of funds in the
firm .
 It deals with the financial decision making of the firm.
 It procures adequate finance from various sources and
its utmost effective utilization for the attainment of
organizational objectives.
 S.C. Kuchhal Financial Management deals
with procurement of funds and their effective
utilization in the business.

7. Scope
Traditional
Approach
• Raising funds
• Procurement of
funds to meet
their financial
needs
Modern
Approach
• Raising of funds
and utilization
of funds
• Viewing the
financial
problems

8. Financial Goals/
Objectives

9. Finance Function
• Decision regarding various sources of funds to
be raised
• Finance manager has to maintain proper balance
between long term and short funds
Financing
decision
• Relate to selection of funds to be raised in
assets
Investment
decision
• Decision to pay or declare dividend.
• Higher dividend increases the market price
of share
Dividend decision
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10. Glossary
 Flow of fund – Movement of funds in the
concern.
 Cash inflows – Entering of funds into the
organization from different sources.
 Procurement – Utilization.

11. Summary
 Financial Management deals with flow of funds in the
concern and investment of funds in different sources .
 Profit maximization helps in increasing the profit of the
firm.
 Wealth maximization helps increasing the earnings of the
shareholders
 Finance function includes investment, financing and
dividend decision.