Now a day’s people are undergoing through various specialization courses of financial management. Investment Decision: The investment decision involves the evaluation of risk, measurement of cost of capital and estimation of expected benefits from a project. Scope of Financial Management Scope of Financial Management Investment decision- Financial management is involved in managing all investment decisions of an organization. Write a specific... Budgeting. Finance links itself directly to several functional departments like marketing, production and personnel. Should an organization make a particular component in-house or should it buy it from outside? One-sided approach- It is more considerate towards the fund procurement … Finance management is one of the important education which has been realized word wide. Distributing the entire profit in the form of dividends or distributing only a certain percentage of it is decided by dividend policy. Be the first to rate this post. It consists of various expenses where cash payments are to be made like salaries and wages payments, and expenses of water and electricity bills, and also the amount required for the purchase of the raw materials, etc. Many people have chosen financial management as their profession. STRATEGIC FINANCIAL MANAGEMENT- AN INNOVATIVE MANAGEMENT PRACTICE It determines the amount of taxation that stockholders pay. Stability of cash dividends and stock sets the parameter which determines the number of investment opportunities. As there is a different source of raising funds are available in the market. The Scope of Strategic Financial Management These two main decision will focus on providing answers to the following questions: Should a new factory be built for the purpose of producing (and selling ) a new product or should a company already involved in the production of such a product be acquired? Short term assets can be exchanged with cash within one calendar year. To decrease the risk, a stable equilibrium is required between debt and equity. Read E-Learning Tutorial Courses - 100% Free for All. There is always a source for those who want to get in-depth knowledge on it. In financing the … Approach of financial management is not limited to business functions but it is a backbone of commerce, economic and industry. The total funds requirements the firm b. It affects success, growth and volatility of a company. Investment decisions involve risk evaluation, measuring the cost of capital, and … Also I like to share valuable information across various good sites. That is the reason where all the financial decisions is directly linked with optimizing / maximization the value of a company. Define objectives precisely. Hi, You have a nice website, after reading your post on nature of financial management notes. The person who Manages finance is called as financial manager. In other words, it can also be termed as applying principles of management to the financial resources of an organisation.eval(ez_write_tag([[300,250],'commercemates_com-medrectangle-4','ezslot_5',121,'0','0'])); The first and foremost function of financial management is that it initially estimates the finance needed for the smooth running and functioning of the business. You can download free for “Nature of Financial Management pdf” and “Scope of Financial Management pdf” from the below link by just unlocking the social locker. The main aim of financing decision is to cover expenses and investments. UNIT-1 Strategic financial management Definition: According to G P Jakhoti,” SFM refers to both, the financial implications or aspects of various business strategies and the strategic management of finance.” SFM related to the concept of applying financial management practices to strategic decisions related to financial status. Importance of Strategic Financial Management, Meaning of Strategic Financial Management, Helps in Detecting the requirements of capital in the business, Helps in deciding the composition of the capital structure, Allocating and investing in finance raised, Features and Characteristics of Financial Management, Advantages and Disadvantages of Financial Management, Role and Importance of Financial Management. Creditors, bills payable, outstanding expenses, bank overdraft, etc are a firm’s short term liabilities. Identify and quantify available and potential resources. The common types of fundraising methods are raising funds through issuing shares & debentures, simply taking loans from the financial institution, or through the issuance of securities like bonds. Scope and Objectives of Financial Management BASIC CONCEPTS Let us understand the nature of financial management with reference of this discipline. It is one of the most important techniques which is required for any business organisation because unless and until finance of the company is managed properly no function in the organisation can be performed properly. This knowledge will assist you in empowering your financial management decisions. It makes sure that whether all the activities are going in accordance with the pre-decided plans and if not accurate control measures are taken. The function of Strategic financial management starts from detecting the number of funds required for the business, then looking for the means or the ways through which these funds are raised at cheaper rates so that the financial requirement of the business are fulfilled. Investment decision- Financial management is involved in managing all investment decisions of an organization.Investment decisions involve risk evaluation, measuring the cost of capital, and estimating benefits expected out of a particular project.

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