Financial Management Report: Analysis and Recommendations

This report delves into the core principles and practices of financial management within an organizational context. It begins by defining financial management as the planning, controlling, organizing, and monitoring of financial resources to achieve organizational goals and objectives. The report highlights the critical role of finance as the lifeblood of any organization, emphasizing the importance of a continuous flow of funds for smooth operations and growth. It explores the objectives of financial management, including ensuring an adequate supply of funds, maximizing shareholder returns, and efficient fund utilization to generate maximum benefits at minimal costs. The report further discusses the importance of sound financial management for commencing, operating, and expanding businesses, particularly in the current market economy. It emphasizes the significance of financial management in profit maximization, wealth maximization, and making informed investment decisions. The report concludes by summarizing the key functions of financial management, including planning, organizing, controlling, and utilizing financial resources efficiently to help the business achieve its goals and objectives.

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Financial Management

TABLE OF CONTENTS
TABLE OF CONTENTS................................................................................................................2
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
CONCLUSION................................................................................................................................3
REFERENCES................................................................................................................................4

INTRODUCTION
Financial management is activity for the organisation. This refers to planning,
controlling, organising and monitoring the financial resources with the motive of achieving
organisational goals & objectives. This is the ideal practice to control the financial activities of
the organisation like the funds procurement, funds utilisation, payments, accounting risks
assessment and all other relating to money. Financial management is the application of general
management principles for financial possession of the enterprise. Efficient management of the
organisational finance provides with regular service and quality fuel for functioning effectively
in the organisation. On the other inability of the company to manage its financial resources could
lead to barriers having severe repercussions on the development and growth of the enterprise.
MAIN BODY
Finance is the life blood of every organisation and it must have a continuous flow of the
fund to and from the organisation. Money makes wheel of business to move fast and smoothly.
Sound plan, efficient production systems and the excellent marketing networks are hampered in
absence of the timely and adequate supply of the funds.
Objectives of the financial management are of ensuring regular as well as adequate
supply of the funds to concerns. To ensure that there are adequate returns available to
shareholder that depends over earning capacity, market prices of shares and shareholder
expectations. Financial management aims at the most efficient utilisation of the funds available
or procured for generating maximum benefits at least costs (Shapiro and Hanouna, 2019).
Financial management also ensure that the financial investments made by the company are safe
and secure, ventures are reliable or the other companies are giving adequate returns over their
investments in which the funds are invested. Objective of the financial structures is to have the
sound capital structure with the most adequate mix of debt and equity where the cost kept at
minimum.
Sound financial management is very essential for the company as all the other activities
are dependent over the availability of funds for carrying out the business operations. Business
firms require finance for commencing the business operations, carrying out the operations and
the expansion for growth. Finance is an essential operative function of the organisation.
Companies are required to raise funds from several numbers of sources and utilising those funds
for adding value. Financial management is required to have the efficient policies and
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programmes for judicious utilisation of the financial resources. Economic and adequate financing
also provide differential advantage to companies in market place. Success of firms depends over
the manner in which companies raise the funds, utilise the funds and disburse those funds. in the
current scenario of money market economy the importance of the finance has increased from
before because of the increasing scale of business operations and the capital intensive methods of
production and distributions. It is essential fuel for running the business activities like the
production, marketing, purchasing and the personnel management. Success of very enterprise is
measured in financial terms. Efficient administration and organisation of finance function is vital
for successful functioning of the business enterprise.
Importance of Financial management
It is very essential for every business enterprise that is running its operation for earning
profits and maximising its wealth. Finance is important for each and every segment of the
enterprise. Businesses cannot run successfully without the availability of adequate financial
sources. A company is able to achieve the desired organisational goals and objectives when it is
able to manage its financial resources in the best manner along with otter business activities.
Profit maximisation is the main motive of every business enterprise. it is the operation al
concept that signifies the operational efficiency of the firm. The motive of the company could be
achieved for allocation of the resources within the activities of business. Financial management
helps the business enterprise in efficient planning of the policies and strategies that will be
adding value to the invested money. It provides the business with efficient procurement of the
financial resources from different alternative sources (Porto, Passos and Figueiredo, 2017)..
Financial managers analyse the most adequate option from the option that will be most beneficial
at the lowest cost to the company. Managers using this make effective allocation of the financial
resources among different activities of the business. This helps the business ion controlling the
costs and expenditures that are incurred by the enterprise for carrying out production and other
business activities.
Financial management also helps the enterprise in efficient decision making for business
by identifying the productive areas and unproductive areas of the business. Companies promote
the productive areas for earning higher returns while on the same time it also eliminated the
unproductive activities that are consuming unnecessary costs of the enterprise and declining the
profit levels of the business (Jones And et.al., 2018). Wealth maximisation is also an important
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role carried out by the financial management. Managers before making the financial decisions
carry out detailed analysis about the possible actions they can regarding the business and what
are there related business outcomes. They carry out various tests that help them in increasing the
wealth of the shareholders and adding value to the organisations. Financial management helps
the business in making various investments decisions for the business growth and expansion.
Using the techniques and concepts of financial management they adopt the option that is most
beneficial for the enterprise and provide maximum returns at minimal costs. The options that are
not adequate in the long run of the business are not adopted. Financial management enables the
company to make appropriate investments maximising their present worth and helps the business
in growth and achieving success.
CONCLUSION
The above study shows that financial management is one of the most important function
carried out by the enterprise. this enables the company in effectively planning, organising
controlling utilising the financial resources in the most efficient manner. Financial management
helps the business in achieving the goals and objectives of the enterprise.
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REFERENCES
Books and Journals
Shapiro, A.C. and Hanouna, P., 2019. Multinational financial management. Wiley.
Jones, C. And et.al., 2018. Financial Management for Nurse Managers and Executives-E-Book.
Elsevier Health Sciences.
Porto, U.C.M., Passos, F.U. and Figueiredo, P.S., 2017. Are competencies and corporate strategy
aligned? An exploratory study in Brazilian steel mills. Revista Ibero Americana de
Estratégia.16(4).pp.117-132.
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