Financial Management: Functions, Importance, Role of Finance Manager, and Sources of Capital

FINANCIAL
MANAGEMENT

Table of Contents
INTRODUCTION ..........................................................................................................................3
Main Body.......................................................................................................................................3
Define financial management.....................................................................................................3
Functions of financial management in a business enterprise......................................................3
Importance of financial management..........................................................................................4
Role of finance manger in a company.........................................................................................4
Short-term and long-term sources of capital that are available to a company for running a
business.......................................................................................................................................5
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
The term financial management refers to the process of planning, controlling and
directing the financial activities to assure the procurement and proper utilisation of funds
(Behbahaninia, Akbarian Shurkaei, and Hosseinzadeh., 2019) . The following report looks into
the concept of financial management and its function in an organisation. Moreover, this report
also represents the role of a finance manager in a company and sources of finance for the short-
term and long-term.
Main Body
Define financial management
Financial management is the principle of management that is applicable in a business
enterprise to organise its finances in an appropriate manner. This management has three elements
that covers the decisions regarding investments, financial and dividend decision. These segments
involves capital budgeting decisions, funds raising decisions from correct sources, and net profit
distribution decisions respectively.
Functions of financial management in a business enterprise
 The management of this kind helps in the evaluation of the capital requirements which is
based on expected costs and upcoming profits.
 It helps in selecting the appropriate sources of funds from the available sets.
 It assists in managing the cash and make sure on the availability of cash in the business
firm so that operational activities can be conducted in a smooth manner (Byun and et.al.,
2019) .
 It does not only plan and organize the money, but it also helps in controlling the
unnecessary flow of funds within a business.
 It helps in identification of dividend rates.
 It provides the clarification on volume of retained profits that would be grounded on the
innovative and diverse plans of a firm.