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State the primary objective of Financial management.

Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 preetham asked almost 3 years ago

Hi, State the primary objective of Financial management? give a brief description on that.

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 veeru answered over 2 years ago

Financial management is the responsibility of planning, directing, organizing and controlling a company’s capital resources. Small business owners typically complete this function because they are responsible for all company resources. Larger business organizations may have a financial or accounting manager to handle this business function. Financial management has several objectives in a business. Most of the objectives serve in a support capacity to provide business owners with relevant information on the company’s business operations.

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 CA Sandeep Bohra answered almost 3 years ago

> Primary objective of Financial management -Financial management refers to the efficient and effective management of money (funds) in such a manner as to accomplish the objectives of the organization. It is the specialized function directly associated with the top management. The significance of this function is not seen in the 'Line' but also in the capacity of 'Staff' in overall of a company. It has been defined differently by different experts in the field. -Profit Maximization occurs when marginal cost is equal to marginal revenue. This is the main objective of Financial Management. Wealth maximisation means maximisation of shareholders' wealth. It is an advanced goal compared to profit maximisation. **-Objective of Financial Management** -Profit Maximization occurs when marginal cost is equal to marginal revenue. This is the main objective of Financial Management. -Wealth maximisation means maximisation of shareholders' wealth. It is an advanced goal compared to profit maximisation. -Survival of company is an important consideration when the financial manager makes any financial decisions. One incorrect decision may lead company to be bankrupt. -Maintaining proper cash flow is a short run objective of financial management. It is necessary for operations to pay the day-to-day expenses e.g. raw material, electricity bills, wages, rent etc. A good cash flow ensure the survival of company. -Minimisation on capital cost in financial management can help operations gain more profit

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Open uri20170510 32134 s5bvk0?1494421637 ARJUN PRATAP SINGH answered almost 3 years ago

"Dear Friend, as far as your query is concerned that State the primary objective of Financial management. Let me informed that Financial management is the responsibility of planning, directing, organizing and controlling a company’s capital resources. Small business owners typically complete this function because they are responsible for all company resources. Larger business organizations may have a financial or accounting manager to handle this business function. Financial management has several objectives in a business. Most of the objectives serve in a support capacity to provide business owners with relevant information on the company’s business operations. Support Accounting Financial management has an objective to support the company’s accounting department. Financial managers do not usually complete everyday accounting functions. They typically review the information from the accounting department and review this information for accuracy and validity. Corrective measures or suggestions can be made to improve the company’s accounting information. Accounting information plays an important role in small business. Business owners often use accounting information to secure external financing from banks, lenders and investors. Provide Decision Information Business owners often require financial or accounting information when making business decisions. One objective of financial management is to provide business owners and other individuals with information for making business decisions. Information must be useful, relevant and accurate. Financial managers are usually an intermediary between the business owner and other operational managers. This saves the business owner time and effort from wading through extensive information with no relation to the decision at hand. Risk Management Risk management is often a primary objective for financial management functions in larger business organizations. Risk management ensures companies do not face undue pressure or risk from various financial situations. Financial rooms can result from business opportunities providing inadequate financial returns, debt financing with unfavorable loan terms, lack of available business credit and unstable financial investments. Financial managers often spend copious amounts of time reviewing their company’s financial activities to ensure the least amount of risk is absorbed by the company. Improve Operational Controls Financial management has a responsibility to improve operational controls and workflow. Financial managers often review information from several divisions or departments within their company. The focus of this review process ensures company employees are operating within standard company guidelines. Financial managers can make suggestions to business owners for improving the company’s controls and business operations. These suggestions outline specific objectives for reducing waste, limiting unnecessary expenditures and improving employee productivity. Each objective can help business owners improve their company’s overall financial operations. Hope answer was helpful to you Regards, Arjun Pratap Singh "

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