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..............................................................................................................................................11
APPENDIX..................................................................................................................................................12

INTRODUCTION
Finance may be generally described as a business practice concerned with the arranging,
raising, managing, and administration of funds. It is a science and art to manage finance, so the
funds are spent in the right places. Financial management is primarily concerned with the
efficient management of funds in the company (Widyastuti and et.al, 2020). It is the aspect of
performance management that is concerned with evaluation and organizing the company's
financial operations, regardless of its scale, type of company, venue, and so on. Each
corporation's aim is to make better use of its finance centre. This report based on the
management of finance in which mention all the financial statements that prepared by the
different types of organisation to achieve their financial golas and objectives. In this report
consist of importance of financial management and define different financial statements that
prepare by the entities. Along with define use of ratio in financial management and improve
business performance on basis of financial management.
SECTION 1
Concept & importance of financial management
Financial management is the safe and accurate management of funds in order to achieve
the organisational goals. It is the advanced role that is closely related to higher leadership. This
role is important not only from the 'Line' but also in the capability of 'Staff' in the enter the
system of an organization. Numerous researchers in the sector have described it accordingly. It
covers how to collect money as well as how to distribute it, i.e. capital budgeting. It is not only
about lengthy money management, but about how to manage quick capital such as current assets.
It also addresses the investors' payout plans.
Importance of financial management
Importance for shareholders: This is the secondary importance of financial accounting, as it
means that investors are the actual or partial members of the corporation, and they own a certain
control of the business. The corporation provides reports of financial statements and its dealings
to the owners of the enterprise. The financial statement and benefit and general ledger are
evidence. From the other hand, entire representatives can provide clarity to stakeholders of the