Importance of Financial Management
management helps to determine the financial requirement of the business concern
and leads to take financial planning of the concern. Financial planning is an
important part of the business concern, which helps to promotion of an enterprise.
Acquisition of Funds
management involves the acquisition of required finance to the business
concern. Acquiring needed funds play a major part of the financial management,
which involve possible source of finance at minimum cost.
Proper Use of Funds
use and allocation of funds leads to improve the operational efficiency of the
business concern. When the finance manager uses the funds properly, they can
reduce the cost of capital and increase the value of the firm.
management helps to take sound financial decision in the business concern.
Financial decision will affect the entire business operation of the concern.
Because there is a direct relationship with various department functions such
as marketing, production personnel, etc.
of the concern purely depends on the effectiveness and proper utilization of
funds by the business concern. Financial management helps to improve the
profitability position of the concern with the help of strong financial control
devices such as budgetary control, ratio analysis and cost volume profit
Increase the Value of the Firm
management is very important in the field of increasing the wealth of the
investors and the business concern. Ultimate aim of any business concern will
achieve the maximum profit and higher profitability leads to maximize the
wealth of the investors as well as the nation.
are possible only when the business concern earns higher profitability and
maximizing wealth. Effective financial management helps to promoting and
mobilizing individual and corporate savings.
financial management is also popularly known as business finance or corporate
finances. The business concern or corporate sectors cannot function without the
importance of the financial management.