Financial Management

From an organizational point of view, the process of financial management is associated with financial planning and financial control. Financial planning seeks to quantify various financial resources available and plan the size and timing of expenditures. Financial control refers to monitoring cash flow. Inflow is the amount of money coming into a particular company, while outflow is a record of the expenditure being made by the company. Managing this movement of funds in relation to the budget is essential for a business.

At the corporate level, the main aim of the process of managing finances is to achieve the various goals a company sets at a given point of time. Businesses also seek to generate substantial amounts of profits, following a particular set of financial processes.

Financial managers aim to boost the levels of resources at their disposal. Besides, they control the functioning on money put in by external investors. Providing investors with sufficient amount of returns on their investments is one of the goals that every company tries to achieve. Efficient financial management ensures that this becomes possible.

Strong financial management in the business arena requires managers to be able to:

[*]Interpret financial reports including income statements, Profits and Loss or P&L, cash flow statements and balance sheet statements

[*]Improve the allocation of working capital within business operations

[*]Review and fine tune financial budgeting, and revenue and cost forecasting

[*]Look at the funding options for business expansion, including both long and short term financing

[*]Review the financial health of the company or business unit using ratio analyses, such as the gearing ratio,profit per employee and weighted cost of capital

[*]Understand the various techniques using in project and asset valuations

[*]Apply critical financial decision making techniques to assess whether to proceed with an investmtn

[*]Understand valuations frameworks for businesses, portfolios and intangible assets

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[Dhruv Bindhani]

From an organizational point of view, the process of financial management is associated with financial planning and financial control. Financial planning seeks to quantify various financial resources available and plan the size and timing of expenditures. Financial control refers to monitoring cash flow. Inflow is the amount of money coming into a particular company, while outflow is a record of the expenditure being made by the company. Managing this movement of funds in relation to the budget is essential for a business.

At the corporate level, the main aim of the process of managing finances is to achieve the various goals a company sets at a given point of time. Businesses also seek to generate substantial amounts of profits, following a particular set of financial processes.

Financial managers aim to boost the levels of resources at their disposal. Besides, they control the functioning on money put in by external investors. Providing investors with sufficient amount of returns on their investments is one of the goals that every company tries to achieve. Efficient financial management ensures that this becomes possible.

Strong financial management in the business arena requires managers to be able to:

[*]Interpret financial reports including income statements, Profits and Loss or P&L, cash flow statements and balance sheet statements

[*]Improve the allocation of working capital within business operations

[*]Review and fine tune financial budgeting, and revenue and cost forecasting

[*]Look at the funding options for business expansion, including both long and short term financing

[*]Review the financial health of the company or business unit using ratio analyses, such as the gearing ratio,profit per employee and weighted cost of capital

[*]Understand the various techniques using in project and asset valuations

[*]Apply critical financial decision making techniques to assess whether to proceed with an investmtn

[*]Understand valuations frameworks for businesses, portfolios and intangible assets

[/list]

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