This is for the PCC BHS SY 2012-2013

1. Goal and Scope of Financial
Management
Financial Management
PCC BHS
SY 2012-2013

2. Goals of Financial
Management
Profit Maximization:
Maximization of profits is very often considered as
the main objective of a business enterprise.
The objective of financial management is the same as
the objective of a company which is to earn profit.
The shareholders, the owners of the business, invest
their funds in the business with the hope of getting
higher dividend on their investment.
Moreover, the profitability of the business is an
indicator of the sound health of the organization,
because, it safeguards the economic interests of
various social groups which are directly or indirectly
connected with the company e.g. shareholders,
creditors and employees.

3. Goals of Financial
Management
Wealth Maximization:
The wealth maximization (also known as value
maximization or Net Present Worth
Maximization) is also universally accepted
criterion for financial decision making. The
value of an asset should be viewed in terms of
benefits it can produce over the cost of
capital investment.
The value of a firm is represented by the
market price of the company's stock. The
market price of a firm's stock represents the
assessment of all market participants as to
what the value of the particular firm is.

4. Scope of Financial
Management
1. Procurement of Short term and long term
funds from financial institutions.
2. Mobilization of funds through financial
instruments such as equity shares,
preference shares, debentures shares,
bonds, notes and so fourth.
3. Compliance with legal and regulatory
provisions relating to funds procurement,
use and distribution as well as
coordination of the finance function with
accounting function.