Financial Management Report - University Finance Course, Task 4

This report provides a detailed analysis of financial management, emphasizing its significance in organizational success. It begins by defining financial management and its core functions, including the acquisition, allocation, and supervision of financial resources. The report highlights the importance of financial functions in decision-making related to investment, financing, dividends, and liquidity. It also explores the objectives of a financial manager, such as raising capital and ensuring optimal resource allocation for profit planning and risk management. Furthermore, the report describes various sources of finance, including retained earnings, debt issues, equity funding, and crowdfunding, outlining their respective advantages and disadvantages. The conclusion reinforces the critical role of financial management in fostering organizational growth and stability through the strategic utilization of financial resources and the selection of appropriate funding sources.

Task 4: Financial
management Report
– individual work

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Explain financial management....................................................................................................3
Significance of financial functions within an enterprise.............................................................4
Explain the objective of financial manager in an enterprise.......................................................4
Describe various sources of finance...........................................................................................5
CONCLUSION...............................................................................................................................6
REFRENCES...................................................................................................................................6
Books and journals......................................................................................................................6

INTRODUCTION
Financial resources are one of the most important resources of an organisation and every
company requires skilled managers for effective financial management. This helps the company
effectively use their financial functions to accomplish various organisational goals and
objectives. This report contains detailed information about financial management and the
significance of financial functions in various organisational processes. In addition to this, role
and objectives of financial manager in an enterprise and several sources which provide a
business capital to start or expand their company with short term as well as long term options are
described in this report.
MAIN BODY
Explain financial management
Financial management refers to utilisation of generic managerial concepts and principles
to decision making process related to financial matters of an organisation. It involves
supervising, planning, coordinating and guiding various financial process such as acquisition and
usage of capital of the company. Field of financial management involves allotment, acquirement
and supervision of al fiscal resources within a company to ensure perpetual presence of capital to
conduct various operations, returns which are according to the expectations of the shareholders,
minimise risk on investment and to implement a suitable financial system.
An organisation swiftly attains their objectives by effective management of financial
resources (Finkler, Smith and Calabrese, 2018) . Financial management lowers the risk related
to expansion and sudden change in consumer preferences which negatively impact the business.
Competent usage of capital within a company prepares the company for future changes and
helps them attain competitive advantage by giving appropriate funds to various departments
which enhance the overall performance of the company.
Significance of financial functions within an enterprise
Finance function includes effective acquirement and usage of capital to conduct
operations which help the company grow exponentially. Primary purpose of this function is to
male decisions related to investment, financing, dividend and liquidity. Other objective of
finance function is related to processing claims, providing payrolls and being a facility for
deposit of pension systems and gratuity (Henry, 2016) . Management of activities related to

gathering taxes from employees, estimating requirements of funds also comes under financial
functions. Accurate predictions of future financial needs of the company and investment of
current financial assets which generate revenue, increase profits and minimise costs and risk of
the investment help the company expand their financial reserves which are used for
advancement, expansion and growth of the business (Jones and et. al., 2018) . Identification of
suitable sources from which the company gains capital is an important aspect of financial
functions and helps the company complete various monetary requirements needed for smooth
running of various activities conducted at the premise of the firm. Financial function assures that
capital available to the company is unengaged and effectively used for growth of the company.
Minimisation of risk related to capital present in the firm is ensured by financial functions which
allows timely payment of bills and prevents the organisation from becoming bankrupt (Mishra,
2018) . The finance functions makes the decision making process related to frequency and
amount which money should be returned to the shareholders of the company. This creates
appropriate equilibrium between net profits and returns provided in the form of dividends which
satisfies the shareholders while assuring presence of competent credit reserves for any abrupt
downswing in the business.
Explain the objective of financial manager in an enterprise
Financial manager takes decisions related to financial functions of a company which
have a direct impact on the net profit, success and brand image of the corporation. The primary
objective of financial manager is to raise capital from suitable sources such as debt and equity
for smooth working of the company. Allotment of capital present in the firm in a way which
guarantees their optimal usage which is completed by looking at growth potential of the
corporation and source of generating capital is another role of the financial manager. Profit
planning is responsibility undertaken by the financial manager which involves formulating
strategies and taking decisions which help the company gain target amount of profit (Okanazu,
2018) . Formation of suitable budget is important in this process which needs to be analysed if
there is change in market condition or introduction of new variables which impact previously
formed strategy. It is the responsibility of the manager to predict risk related to trade of shares
and debentures by using methods which clearly present the conditions of the capital market.

Describe various sources of finance
All organisations need to raise capital from various sources to complete different
organisational objectives such as technological advancements, expand to global markets,
enhance workforce capabilities or other operations necessary for the growth of the organisation.
The primary source for collection of funds is from retained earnings of the company which is the
total amount of money a company has after deducting expenditure and obligations. This source
of capital is generated internally and long-term sources which are usually used to give pay
dividend to the shareholders (Shapiro and Hanouna, 2019) . Debt issues are primary source of
capital generated from outside source for long term and allow large group of investors to become
lenders to the company. This practice involves payment of interests and principle to the lenders
and inability to pay interests results in insolvency. Usually the interest payment is less costly for
the business and such payments are deducted in taxes. Equity funding involves selling shares of
the company to investors and shareholders of the corporation and gain rights related to company
proprietorship and is long term source of capital. Crowdfunding is currently popular source of
gaining capital and involves acquiring small sum of money from huge amount of people to move
forward with a business idea and investors usually receive rewards from the company after their
success for giving them a small sum of money during their start (Finkler, Smith and Calabrese,
2018) . The main benefit of this type of funding is that it lowers risk for inexperienced
entrepreneurs. It is short term source for funding.
CONCLUSION
From the above report it is concluded that the financial management is an important aspect of an
organisation as it helps them generate and allot funds for growth of the company. This objective
is completed by financial managers by usage of managerial principles for supervising financial
resources of the company and generating funds from several sources such as equity capital, debt
issue and others depending on risks related to such sources.

REFRENCES
Books and journals
Finkler, Smith and Calabrese, 2018. Financial management for public, health, and not-for-profit
organizations. CQ Press.
Henry, 2016. Funding innovation: Moving the business forward. Surgery, 160(5). pp.1135-1138.
Jones and et. al., 2018. Financial Management for Nurse Managers and Executives-E-Book.
Elsevier Health Sciences.
Mishra, 2018. Financial management and forecasting using business intelligence and big data
analytic tools. International Journal of Financial Engineering, 5(02). p.1850011.
Okanazu, 2018. Financial management decision practices for ensuring business solvency by
small and medium scale enterprises. Acta Oeconomica Universitatis Selye, 7(2). pp.109-
121.
Shapiro and Hanouna, 2019. Multinational financial management. John Wiley & Sons.