Importance of Financial Management

Importance of
Financial
Management

Contents
INTRODUCTION...........................................................................................................................................3
SECTION 1....................................................................................................................................................3
Concept & importance of financial management....................................................................................3
SECTION 2....................................................................................................................................................5
Difference types for financial statements and use of ratios in financial management............................5
SECTION 3....................................................................................................................................................6
Company’s key finance performance indicators:.....................................................................................6
SECTION 4....................................................................................................................................................7
Discuss the process which business use for improve its financial performance:.....................................7
CONCLUSION...............................................................................................................................................9
REFERENCES..............................................................................................................................................10

INTRODUCTION
Financial management is the process of increasing efficiency and productivity, allocating
financial capacity, and monitoring financial activities in order to meet an institution's objectives.
Financial management can assist a corporation in achieving the majority of its objectives.
Management consultants will gain a thorough picture of their company's accounting health if
they make good business judgments. This allows the finance department to supply information
that aids in the development of a long-term strategy and decision-making. The significance and
meaning of financial reporting in the workplace are discussed. According to the calculations, the
company must employ all of its ratios in order to increase profitability because this aids in the
execution of the company's objectives and goals. Financial ratios are important to attain in
addition to evaluating an employee's performance.
SECTION 1
Concept & importance of financial management
Funding is the lifeblood of any business, and it necessitates a constant flow of cash in and out.
As long as there is demand, the gears of industry will continue to turn fast. Accounting is the
method of planning, organising, managing, and controlling a corporation's monetary operations.
Financial management is defined by Guthman and Dougal as "the act of planning, acquiring,
handling, and protecting capital employed in industry." It has to do with the proper acquisition
and deployment of capital.
Importance of financial management
Financial planning: Financial planning is one of the most important components of financial
management. It lies forth all of the financial terms that related to a company's interest. In the
later stages of a company's earnings accounting life, financial advising partners will also make
suggestions and sensible activities rather than stressing. Any industry appears to have a key part
of money management. As a result, the bulk of the responsibility for its growth goes to corporate
accounting procedures.
Safeguarding: In order to achieve company goals, one of the most crucial components of
financial accounting is maintaining financial security. For a corporation to operate properly, it is
critical to quantify the areas where finances are necessary and to allocate them correctly across