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Financial Management Assignment - Solved

   

Added on  2020-10-23

6 Pages1387 Words198 Views
FINANCIAL MANAGEMENT

Table of ContentsINTRODUCTION ..........................................................................................................................31. Discussing the role of management in meeting stakeholders objectives,application ofagency theory and their impact on companies decisions............................................................32. Discussing the role of fiscal, monitory, interest rate and exchange rate policies...................4CONCLUSION................................................................................................................................5REFERENCES................................................................................................................................6

INTRODUCTION Financial management is an important aspects for planning and managing the company'sresources. It plays an important role in achieving business objectives as it helps in properutilization and allocation of funds in organisation. Present report will help in anticipating the roleof financial management in meeting company's stakeholders objectives. The report will addressthe importance of agency theory in financial management and its impact on investment,financing and dividend policy. Further, the report will help in understanding role of fiscal,monetary, interest rate and exchange rate policy in achieving macroeconomic policy.1. Discussing the role of management in meeting stakeholders objectives,application of agencytheory and their impact on companies decisions.The act of planning, organising, directing and controlling all the financial activities in anorganisation is financial management (Brigham & Houston, 2012). The financial activities willinclude obtaining and utilizing the funds of a company in maximising the productivity andprofitability of the organisation.Stakeholders of an organisations are the groups that influence or have interest in thefirm's activities and its decisions regarding the future activities in meeting company's overallobjectives. The major stakeholders in a company includes shareholders, government, employees,customer and bondholders. They have different objectives and goals which are based on theirdiverse interest in the firm (Higgins,2012). The fundamental financial objectives of the firmrelates to the procurement, allocation and control of financial resources of an organisation.Following are some fundamental objectives of financial management in meeting stake holder'soverall goals and objectives are as follows:Profit maximization: It is one of the min objectives of financial management of anorganisation. The finance manager tries to earn maximum profits for the company in theshort-term and long term. Stakeholders objectives will increasing in the value of theirshare, employees will want in maximising the growth of company that will help in theirsurvival and security of job.Proper Utilization of funds: the finance manager of an organisation must make properutilization of company's funds. A proper strategy and budget should be prepare to use thefunds of company in most profitable way that will help in increase the profitability ofcompany (Chandra, 2011). The company's finance should not waste its funds in non-

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