Welcome to BBU Student Network! You are visiting BBU Student Network,

Dear all classmates,

In order to help to grow the network and to attract new members, we would like you all to check, reply and update your information. If you might have time to provide brief comments on how this network helped you in your study and your present career, this would be very helpful. You can post in this discussion or send feedback directly to me. I establish this webblog to allow all members of BBU student network to joint and provide comments/ideas. Even if we will finish our class from BBU at the end of year, please also stay with us in our network and our webblog.

Some possible benefits from being the members of this site (Webblog) or BBU Student Network might include:* New Contacts * New Research * New Information (eg: general knowledge, no class, end-class party...etc) * Other Areas...

There was an error in this gadget

Financial Management




what is financial management?

Introduction

Financial Management can be defined as:
The management of the finances of a business / organisation in order to achieve financial objectives
Taking a commercial business as the most common organisational structure, the key objectives of financial management would be to:
• Create wealth for the business
• Generate cash, and
• Provide an adequate return on investment bearing in mind the risks that the business is taking and the resources invested
There are three key elements to the process of financial management:

(1) Financial Planning
Management need to ensure that enough funding is available at the right time to meet the needs of the business. In the short term, funding may be needed to invest in equipment and stocks, pay employees and fund sales made on credit. 
In the medium and long term, funding may be required for significant additions to the productive capacity of the business or to make acquisitions.
(2) Financial Control
Financial control is a critically important activity to help the business ensure that the business is meeting its objectives. Financial control addresses questions such as:
• Are assets being used efficiently?
• Are the businesses assets secure?
• Do management act in the best interest of shareholders and in accordance with business rules?
(3) Financial Decision-making
The key aspects of financial decision-making relate to investment, financing and dividends:
• Investments must be financed in some way – however there are always financing alternatives that can be considered. For example it is possible to raise finance from selling new shares, borrowing from banks or taking credit from suppliers
• A key financing decision is whether profits earned by the business should be retained rather than distributed to shareholders via dividends. If dividends are too high, the business may be starved of funding to reinvest in growing revenues and profits further.
Related Posts Plugin for WordPress, Blogger...