Financial Management: Meaning, Importance, Role, and Sources of Finance

FINANCIAL MANAGEMENT
REPORT

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Meaning of Financial Management.............................................................................................3
Importance of financial function within organization.................................................................3
Role of Financial Manager...........................................................................................................4
Sources of Finance.......................................................................................................................5
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................1

INTRODUCTION
Finance is the life-blood of any organization of any organization and should be
continuous flow of funds to run the business. Sound financial management is used for operation,
production and marketing purpose mainly (Azam, Abdullah, 2015). General principle of
management are applied in financial management. This report content the financial management
and their functions in the organization. It also analyses the role of financial manager in
organization and how organization can raise funds for their short term and long term process.
MAIN BODY
Meaning of Financial Management.
Financial Management include the planning, organizing, directing and controlling of the
financial activities which are procurement and utilization of financial assets and funds of the
organization. This activity include planning, raising, controlling and managing of funds which
are used in the organization activities. It is mainly used for the procurement and utilization of
funds. The management analysis the need of funds, funds to be raised, control of funds,
distribution of surplus fund and capital budgeting for the organization (Cuervo-Cazurra, Nieto,
Rodríguez ,2018). Financial management are used for short run and long run of business
investment decision in fixed assets and current assets. Financial management helps organization
for smooth work flow in all department by regular adequate supply of funds, ensure adequate
return to shareholders, optimum utilizations of funds, ensure safety of investment and to sound
strong in capital structure.
Importance of financial function within organization.
Financial function is one of the segment of financial management. These functions are
used to acquire and utilize of funds for used of operation efficiently. While financial functions
also ensure about enough funds available at efficient cost, efficient use of funds. Financial
functions are been divided into three:
 Long term finance: This includes high amount of financial investment which are time
period of more than 3 years. The sources of long term financial include share capital,
owner capital, debenture, long term loans from financial institution or through internal
sources.
 Medium term finance: This finance include with the time period of 1 to 3 years and being
sourced from financial institution and banks in the form of loans.