PowerPoint Presentation

[Audio] Good morning everyone, today we will focus on the importance of financial management. Financial management involves the management of a firm's finances in order to achieve its goals of profit and wealth maximisation. We will look at the meaning and scope of financial management, the functions of financial management - both short and long term, the role and functions of a finance manager and the goals of a firm - profit maximisation and wealth maximisation. Let's get started..

[Audio] Financial management involves taking strategic actions to maximize a company's profits and create value. This includes both the classical allocation and management of resources, as well as the use of financial instruments to make decisions and increase profits. To achieve this aim, financial managers must take into account a variety of factors and utilize resources effectively. This ensures that the funds are utilized prudently and for the greatest benefit of the firm..

[Audio] Financial management is a crucial element of any organization as it involves the process of procuring and allotting funds for the attainment of objectives. The traditional way of financial management principally focuses on obtaining finances externally, grasping the associated institutional procedures, and adhering to legal and accounting stipulations. The modern approach widens this method by analyzing financial predicaments and allocating funds in line with the organization's prerogatives. It is indispensable that any organization is mindful of these approaches and knows which one is most suitable to realize its desired outcome..

[Audio] Financial management is essential for any business to achieve its goals for maximising profits and wealth. It involves decisions such as the size and growth of the company, the form of asset ownership, and how funds should be raised. The significance of financial management cannot be understated - without it, a business can go off-track and experience losses. It is also necessary to help a business manage its finances and acquire sufficient capital, utilise borrowed money well and make prudent financial decisions..

[Audio] Financial management is an essential component of managing an organisation. Strategies and plans are devised to help achieve the enterprise's goals. This includes the budgeting, planning, and control of financial assets. This helps make certain the organisation is fulfilling all legal necessities regarding finances and any other key performance indicators. Furthermore, it guarantees that each department of the organisation is performing within the budget and aligning with the general plan..

[Audio] As a financial manager, you are responsible for helping your firm to reach its goals of profitability and wealth maximization. To do this, you must manage its finances in a way that optimizes the use of funds. Your job involves a variety of roles and functions, including the raising of funds. This can be done by utilizing both debt and equity. It’s essential to maintain a healthy balance between the two in order to ensure that your business has enough cash and liquidity to meet its obligations. Ultimately, your decisions will affect the profitability, growth, and goodwill of the firm..

[Audio] Without efficient management of a firm's finances, it is impossible to achieve its goals. One of the most important tasks in financial management is the allocation of funds. It is crucial that funds are allocated in an optimal manner, taking into consideration the size and growth capability of the firm and the status of its assets. Furthermore, it is important to think about how the funds have been raised. Not only does this have a direct impact on financial decisions, but indirectly influences other managerial activities. Therefore, the formation of a good asset mix and proper allocation of funds is absolutely essential..

[Audio] "Financial management is one of the most critical components of success for any business organisation. Profit planning is an important part of that success, as it is the process of ensuring that the profit generated is used in the best possible manner to further enhance the prospects of the business. It is about understanding the dynamics of pricing, industry competition, the state of the economy, demand and supply, cost and output and other variables in order to create a balance that leads to increased profitability. By mastering the art of profit planning, a firm is sure to gain a competitive advantage in the market..

[Audio] Capital markets are essential for a company's growth and success. Understanding the stock market is essential to successful financial management. As a financial manager, it is important to understand the risks and rewards associated with the sale and purchase of securities. By evaluating the short and long-term returns, financial managers can create and execute strategies that will ensure a company is maximizing its profits and wealth." Financial management involves making decisions based on market research, careful analysis, and sound judgement. As a financial manager, I must have a clear understanding of capital markets and the risks and rewards associated with trading securities on the stock exchange. By understanding how to accurately assess short and long-term returns, I can develop strategies that will help ensure the financial stability and success of the company..

[Audio] 'It is the discretion of a financial manager as to how to distribute the profits. Many investors do not like the firm to distribute the profits amongst share holders as dividend instead invest in the business itself to enhance growth. The practices of a financial manager directly impact the operation in capital market. An awe-inspiring example of the power of nature is now the topic of discussion.'.

[Audio] Financial management is essential for a successful business. It requires decisions on how to use and distribute the company's finances for the fulfillment of objectives, such as gaining the highest possible profits. Financial tasks can be divided into two types - long-term and short-term decisions. Long-term decisions include investments, financing, and dividends. Short-term decisions mainly include liquidity decisions. Making accurate and efficient financial decisions is critical for reaching the organization's objectives..

[Audio] Financial management is an essential part of organization success, requiring careful planning and decision making in order to utilize resources effectively. Long-term finance decisions are essential as they can affect large amounts of capital expenditure and need to be taken with a long-term goal in mind. Investment decisions are a major factor since they involve dedicating capital to assets that have potential for future cash flow. Therefore, it is important to thoroughly assess the risks and rewards associated with each decision to guarantee financial success in the future..

[Audio] Financial management is an essential component of business success. It involves the management of a company's finances in order to accomplish the objectives of maximising profits and wealth. When it comes to investing, two important factors should be taken into consideration: assessing potential profitability of a new investment and determining a benchmark rate of return for comparison of prospective yields. Unfortunately, predicting and measuring future gains can be a tricky and risky task. Therefore, investment decisions are evaluated based on the expected returns and associated risks..

[Audio] In order to effectively manage finances, finance managers must consider financing decisions, otherwise known as capital-mix decisions. This involves determining the most appropriate proportion of equity and debt to create an optimal capital structure that maximises the market value of shares. When the capital structure is at its optimum level, the firm is managing its finances efficiently..

[Audio] Financial management is a key factor for business success. The finance manager is responsible for selecting the best sources of capital and how to allocate profits. When the capital is not debt-based, the shareholders’ return is equivalent to the firm’s return. Nonetheless, debt capital could be used to increase the shareholders’ return. Yet, it is necessary to find a balance between reducing risk and exploiting the benefit of debt. This balance involves setting up an optimal dividend policy to maximize the market value of the firm’s shares. Formulating and executing such a policy should be done by the finance manager..

[Audio] Financial management aims to maximise profit and wealth and involves managing the finances of a firm. This includes decisions on short term finance and liquidity. Short term finance decisions cover fund requirements of less than one year and are concerned with current assets, current liabilities, short term borrowings and investing surplus cash. Liquidity decisions involve managing current assets to reduce the risk of illiquidity caused by having too much idle cash. Thus, the finance manager must develop techniques for handling current assets to reduce the risk of inadequate liquidity..

[Audio] Financial management plays an important role in how businesses operate. The two main goals of financial management are profit maximisation and wealth maximisation. Profit maximisation is the main objective of any company and is typically measured by the amount of profits made in a given period. To achieve this, firms must find ways to produce maximum output from a given amount of inputs or use minimum inputs for producing a given output - finding an efficient production model. Wealth maximisation, on the other hand, focuses on the current and future value of the business by making short-term and long-term decisions..

[Audio] Financial management is a critical aspect of running a business effectively. Its ultimate goal is to increase profits and build wealth for owners. Maximizing profit can lead to the most efficient use of resources in a competitive market. Yet on the long term, it is not necessarily the most accurate way to measure a company's performance in terms of maximizing economic welfare. This is because of factors such as its ambiguity, ignoring the time value of money, and not accounting for risk..

[Audio] Focusing on the concept of wealth maximisation, it is the process of making the most efficient use of financial resources in order to maximise the value of investments held by the shareholders. It aims to maximise earnings per share, dividend payments, and capital gain by increasing the market price of the shares. Wealth maximisation creates good will for the company in the market. In conclusion, when making financial decisions, wealth maximisation should be the ultimate goal for all firms. Thank you for your attention..