Financial management is crucial for planning, organizing, and controlling the financial aspects of an organization. It involves estimating capital needs, forming a capital structure, allocating revenue, managing monetary value, and financial control. Financial statements, such as balance sheets, income statements, and cash flow statements, provide insights into a company's financial performance. Ratios are used to compare financial performance, identify trends, and assess departmental effectiveness. To improve financial performance, businesses can focus on debt recovery, expense reduction, and effective funding allocation.