The document discusses the key principles of financial management for businesses. It explains that financial management aims to ensure a business never runs out of cash by maintaining proper finances. Some key principles outlined include spending less than revenues generated, planning for unexpected expenses, diversifying revenue sources beyond just investments, organizing financial records and activities, understanding investment risks, and limiting unnecessary debt. The document concludes by promoting a post-graduate program in financial management from MIT School of Distance Education to train candidates to effectively manage organizational finances and enhance employability.

1. MIT School of Distance Education
Principles of Financial Management

2. Financial Management is concerned with maintaining finances in
a business so that it never runs out of cash. It is concerned with
the financial requirements of a business as well as financial
planning. Perfect financial management facilitates business to
make ample profits, expand itself and succeed in the long-run. In
general, there are certain principles of financial management:

3. 1. Expenditure should be less than the revenues generated
Most of the businesses lose balance over finances and are
unable to overcome or avoid debt because they spend more
than the revenues generated. However, for a business to
sustain its position in the long run and to look for further growth,
it must frequently track its financial statement as well as
expenses to avoid excessive outflow.

4. 2. Plan for the unexpected
A business should always be well-equipped to meet the
financial emergencies at any point in time. To overcome such
point of crisis effortlessly, the business must save money and
put restrictions on its cash outflow. This will protect the
business in derailing from its long term goals or objectives.
Thus, financial management must be robust to face any kind
of consequences and achieve the desired goals in a limited
time period.

5. 3. Diversification is not just for investments
For any business, investments are believed to be the best
method to ensure a regular inflow of cash. However,
businesses should not just rely on investment, but they
should regularly find different ways to generate more
revenues.

6. Apart from businesses, even employees working in a
company can finds ways to earn extra income. For this, they
can look for a part-time business or start a small business at
their dwellings. Thus, this brings a change in overall
financial profile.

7. 4. Organising
The very basic step for efficient financial management is to
organise funds and finances. A business must track its
different financial activities and sources which include
brokerage, mortgage, loans or credit limit to avoid any
chaos in the future.

8. 5. Understanding risk
It is a golden rule that more the risk a business takes, more
would be its return on investment (ROI). However, this is
possible only if the business has massive information and
knowledge about finances and investments. Usually,
investment in shares and bonds are considered to be the
best source for earning huge profits. But, at the same time
they involve a higher risk too. So, financial managers should
have an understanding of risks before taking them.

9. 6. Limited debt
To ensure a regular inflow of cash, a business must avoid
taking unnecessary loans and clear all its previous debts.
Furthermore, a business must opt for loans to procure
necessary items only.

10. So these were the principles of financial management.
Finance is the cornerstone of every business so companies
look for finance managers who can maximise profits and
minimise losses. If you wish to become a finance manager,
then you can pursue Post Graduate Diploma in
Management (PGDM) or Post Graduate Diploma in
Business Administration (PGDBA) with Finance
Management as specialisation from MIT School of Distance
Education (MIT-SDE).

11. The course trains the candidates to effectively manage the
finances of the organisation and enhance their employability
skills. So, apply for this job-centric course right away!

12. THANK YOU