Financial Management
Financial Management talks about the controlling, managing, and controlling of various financial activities and the financial assets of big and small companies. Financial management not just deals with the company’s assets but is also concerned about increasing them and benefiting from them simultaneously by minimizing the loss altogether. Various people are playing their role in the financial management of a company and making sure that it does not go into loss and if it does, it is still saved from major losses at the very least.
Financial Management is a proper process applied by a financial manager but first, he needs to define the basic and the true objectives of it.
Basic objectives of financial management
- Increase profits, decrease losses
One of the basic objectives of any company and role is to make sure that the profits steadily increase while the losses are decreased accordingly and the best strategies are applied to make sure that the company sees success after every short-term.
- Ideal usage of finance
The finances of a company can be utilized anywhere and everywhere but it should be counted as one of the main objectives that the finances of a company are ideally utilized meaning that the finances are only spent where needed and are not being thrown away without the hope of getting anything in return at all.
- Creation of reserves
Amongst the many different objectives of financial management, the financial manager makes sure that this objective is also marked on his list of objectives where he makes sure that the company saves enough to create resources of its own which will help it to maintain and keep a much stronger position than before and be able to compete with other companies of their standards and above.
- Mobilization of finances
Another very important objective of financial management is to see that the finances are properly mobilized. At times the company may need to borrow finances from somewhere else. It might be borrowed or by selling the assets of the company itself. A balance and a proper check should be maintained between owned and borrowed finances and resources to better understand the conditions of the company at different times and to make sure it is out of the crisis at all crucial and non-crucial times.
Many other objectives are considered important but these are check-marked on the list of a financial manager and he makes sure that he works on them from the very first day to show the progress that he and the company have made over time.
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