Financial Management: Core Principles and Objectives
1. Meaning of Financial Management
Financial Management refers to the strategic planning, organizing, directing, and controlling of financial undertakings in an organization. It involves applying management principles to financial assets while playing a vital role in fiscal oversight.
In simpler terms, it means procuring the right amount of funds at the minimum cost and utilizing those funds in the most profitable way possible.
2. Scope of Financial Management
The scope of financial management covers every activity involving money within an enterprise, categorized into three major managerial decisions:
A. Investment Decisions (Capital Budgeting)
This involves deciding where to invest funds to generate the highest returns:
- Long-term investment decisions:
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