Financial Management means planning, organizing, directing and controlling the financial activities such as procurement and utilization of funds of the enterprise. It means applying general management principles to the financial resources of the enterprise.
Objectives of Financial Management
Financial management is generally concerned with procurement, allocation, and control of the financial resources of a concern. The objectives can be-
- To ensure a regular and adequate supply of funds to the concern.
- To ensure adequate returns to the shareholders which will depend upon the earning capacity, the market price of the share, expectations of the shareholders.
- To ensure optimum funds utilization. Once the funds are procured, they should be utilized in the maximum possible way at least cost.
- To ensure safety on investment, i.e, funds should be invested in safe ventures so that an adequate rate of return can be achieved.