Financial Management Report: Sources, Functions, and Roles

This report provides a comprehensive analysis of financial management within an organization. It begins with a detailed evaluation of financial management principles, emphasizing its strategic importance in planning, organizing, directing, and controlling financial activities to achieve long-term organizational goals. The report then delves into the significance of finance functions, highlighting their role in identifying financial needs, sourcing capital, comparing financing options, and managing investments. Furthermore, it examines the crucial role of finance managers, outlining their responsibilities in financial planning, decision-making, and capital management. The report concludes with an in-depth discussion of various sources of finance, categorizing them into short-term, medium-term, and long-term financing options, and stressing the importance of striking a balance to maximize market value. The report is structured with an introduction, main body, and conclusion and includes references to academic journals and books to support the analysis.

Financial management
report

Contents
Contents...........................................................................................................................................2
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
1. Detailed evaluation of financial management.........................................................................1
2. Analysis of the importance of the functions of finance within the organisation in an
elaborated manner........................................................................................................................1
3. Discussion of the role of the finance managers within the company......................................2
4. Examination of the different sources of finance......................................................................3
CONCLUSION................................................................................................................................3
REFERENCES................................................................................................................................4

INTRODUCTION
Financial management is one of the most important as well as essential aspect for each and
every firm that is operational in the market as it is regarded as the usage of the functions of
management that is planning, organising, directing, and controlling of all the activities that are
related with finances so that it can help the company to grow and prosper in the market in which
it is operational (Aureli, Magnaghi and Salvatori, 2019). In this report there is a detailed
evaluation of the concept of financial management, importance of the functions of finance, and
the role of finance mangers within the organisation. Apart from this the report also includes an
elaborative discussion of all the sources of finance that are available with the company.
MAIN BODY
1. Detailed evaluation of financial management
Financial management is the strategic planning, directing, organising, and controlling of all
the undertaking that are related with finances of a company so that it can help in achieving the
objective of the firm in the long run. Also in addition to it, financial management involves
applying of different principle of management so that it can improve the overall performance of
the organisation.
2. Analysis of the importance of the functions of finance within the organisation in an elaborated
manner
Finance function is a sub part of financial management only as it is related with planning
and controlling of the financial resources of the company so that the available resources can be
used in an effective and efficient manner that can add value to the enterprise in the long term
context (Gajavelli, 2016). Thus it can be said that the finance function is the backbone of very
organisation that is operating in the industry and without which an enterprise cannot survive in
the market in which it is working and hence has to be evaluated and analysed in an appropriate
manner so that it can help the firm to attain its goals and objectives that are laid down at the
starting of the company. The importance of the finance function are stated below in a systematic
and sequential way-
 Identification of need to finance- It is the foremost function and since it is related with
knowing the capital that will be required in the business to run it in a smooth manner. So,

the finance function helps the owner to understand the amount of capital that is needed in
the company after evaluating the status of current capital that has been invested in it.
 Identification of sources of finance- After the amount has been decided that is needed in
the business the next thing which comes is the areas from where the capital can be raised
and finance function helps the company in that aspect also by opening up various options
like borrowing or getting it from the shareholders.
 Comparison of different sources of finance – After identification of the sources of
finance it is very important to compare all of them on the basis of their cost, risk, market
value, etc. and the finance function helps in evaluating that aspect also so that the best
option from the number of alternatives can be chosen which can add value to the firm in
the market.
 Investment- After comparison is done investment is done at a place that can fetch higher
return so that it can be profitable for the company and the finance function helps the
organisation in this regard also so that the business can invest at a place that can give
higher returns to it in the long run.
3. Discussion of the role of the finance managers within the company
Finance is one of the most critical aspects for each firm without which a company cannot
be profitable in the current market that is highly competitive and dynamic in nature thus the role
of finance managers becomes much more important in the organisation. The role that finance
mangers has within the enterprise are described below in detail-
 Financial planning, decision, and control- Financial managers make appropriate plans
that can work in the market in favour of the company so as to improve its performance as
compared to its rivals. Apart from this they also take decisions so that the profitability of
the firm can be increased and also control various activities that are hampering the
growth of the enterprise by using tolls such as ratio analysis (Galant and ČERNE, 2017).
 Management of capital- It is the main role of the finance manager as they evaluate and
analyse all the aspects and then estimates the requirement of the capital in the business by
making appropriate capital structures so that the capital can fetch higher rate of returns
making the firm profitable.

4. Examination of the different sources of finance
Sources of finance are basically the areas from which a company can raise its capital as and
when needed (Idris, Krishnan and Azmi, 2017). There are different finance sources available but
it is very important to strike a right balance so that it can add market value to the firm.
Evaluation of different sources of finance are done below in detail-
 Short term financing- It is regarded as financing for a time period that is less than a
year. It is very useful to meet the short term requirement of the company and this type of
finance is available mainly in the form of creditors, payables, short term loans, etc.
 Medium term financing- It is a type of financing which is generally for a period of 3-5
years in term and the finance is available in the form of preference shares, bonds,
debentures, medium term loans, etc.
 Long term financing- It is a type of financing that is for a period more than 5 years and
caters the long term requirements of the capital and it is available in the form of share
capital, retained earnings, long term loans, etc.
CONCLUSION
It can be concluded form the above that financial management is a very important aspect as
it helps the firm to grow and prosper in the market and thus every company must analyse and
examine all its related aspects too so that it can help the organisation to improve its positioning
in the industry.

REFERENCES
Books and journals
Aureli, S., Magnaghi, E. and Salvatori, F., 2019. The role of existing regulation and discretion in
harmonising non-financial disclosure. Accounting in Europe. 16(3). pp.290-312.
Gajavelli, B. R. S., 2016. Profitability evaluation and ranking of Indian non-life insurance firms
using GRA and TOPSIS. Journal of Insurance and Financial Management. 2(2).
Galant, A. and ČERNE, K., 2017. Non-Financial Reporting in Croatia: Current Trends Analysis
and Future Perspectives. Management (18544223). 12(1).
Idris, F. H., Krishnan, K. S. D. and Azmi, N., 2017. Relationship between financial literacy and
financial distress among youths in Malaysia-An empirical study. Geografia-Malaysian
Journal of Society and Space. 9(4).