Summary of What is Financial Management? Types, Functions, Objectives.
Main Financial Strategies and Objectives:
- Maximize Profits: Gain insights on costs to manage selling prices effectively.
- Secure Returns for Shareholders: Ensure adequate returns based on market value and shareholder expectations.
- Track Liquidity and Cash Flow: Maintain sufficient funds to meet organizational requirements.
- Optimum Fund Utilization: Utilize procured funds efficiently and at minimal cost.
- Investment Safety: Invest in secure ventures to achieve acceptable returns.
- Sound Capital Structure: Maintain a balanced composition of debt and equity capital.
Functions of Financial Management:
- Calculate Required Capital: Estimate the funds needed based on firm policies and earning capabilities.
- Determine Capital Structure: Decide on the mix of capital sources to minimize costs and maximize shareholder wealth.
- Choose Sources of Funds: Identify various sources for raising finance, such as equity investors, banks, etc.
- Invest Capital: Invest funds in secure and effective ventures to generate returns.
- Procure Funds: Acquire necessary funds while considering market conditions and investor decisions.
- Allocate Profits: Efficiently distribute net profits for emergency reserves, innovation, and shareholder rewards.
- Financial Control: Manage and evaluate finances using tools like forecasting, ratio analysis, and cost control.
Types of Financial Management:
- Capital Budgeting: Determine financial needs for achieving short-term and long-term objectives and manage fund allocation.
- Capital Structure: Analyze how to finance operations and growth, focusing on debt-to-equity ratios.
- Working Capital Management: Manage current assets and liabilities to ensure liquidity and operational efficiency.
The video emphasizes the importance of effective financial management in ensuring an organization's financial health and growth.
Presenters/Sources:
The video is presented by "Education Leaves."
Notable Quotes
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Category
Business and Finance