Finacial Mangement

Finacial Management

Finacial management is a specialized function of general management. It refers to the management of business funds. It is mainly concerned with raising finance and its effective utilization for the achievement of the goals of the organization.

There are two basic aspects of financial management

Raising of Fund
Effective utilization of funds

Thus we can see that financial management is an operational function. It deals with planning, organization, directing, coordinating, and controlling financial activities. It is rightly called resource management since most business activities use finance financial management has acquired a vital place in the modern business world.

Role of financial management

Financial management is essential for all types of organizations i.e. profit marking organizations and non-profit-making organizations. It plays a crucial role in making the best use of financial resources.

There has been significant development in the Indian economy since the introduction of a new economic policy in July 1991. A free market economy and free access to global investment have made financial management more complex than it was earlier. Today it is the most important area of corporate management. The subject matter of financial management is changing at a rapid pace. Ti has become more significant because of development at national and international levels. All this has a direct impact on corporate financial policies.

Financial management has become a subject of considerable importance in developing countries like India. All business entitles arise out of the savings of the society. The savings in the developing countries are merged.

These scarce resources of savings have to be used in many developmental activities. The funds which are used in business activities must be managed.

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