FINANCIAL

MANAGEMENT
SANTA ISABEL COLLEGE OF MANILA
S.Y. 2021-2022

INTRODUCTION TO FINANCE

2022 SUBMITTED BY: MONES, LENNETH B.

BSA-2
 Financial Management is the
strategic planning, organizing,
directing, and controlling of
financial undertakings in an
organization or an institute. It
actualizes the effective handling
of money through controlling
According to J. L. funds in a corporation or for an
Massie, “Financial individual. Moreover, Financial
management is the management uses ratios, equities
operational activity of
and debts to reach investment
a business that is
responsible for
goals.
obtaining and This takes financial decisions
effectively utilizing under three main categories
the funds necessary namely, investment decisions,
for efficient financing decisions and dividend
operation.”
decisions.

The pr i mar y obj ect i ves of Fi nanci al Management

ar e:
1. PROFI T MAXI MI ZATI ON
2. PROPER MOBI LI ZATI ON
3. I MPROVED EFFI CI ENCY
4. BUSI NESS SURVI VAL
5. BALANCED STRUCTURE

1. WHAT IS FINANCIAL
MANAGEMENT?
2. WHAT IS ITS ROLE IN
A BUSINESS?

It helps businesses in
financial planning
and acquisition of
funds;
Aids in effectively
utilizing and
The scope of financial management
allocating the funds
includes financial decisions relating to
received or acquired; raising money from different sources;
the cost of financing projects; and the
Supports businesses
potential returns attained during the
in making critical process. It also provides investment
financial decisions; decisions in the fixed and current assets,

Helps in improving
the profitability of
businesses;
Increases the overall
value of the business;
Provides economic
stability. We must note that
The role of finance in
business is indispensable.
Business owners use
financial data every day
when making decisions.
 3. WHAT ARE THE
BENEFITS OF FINANCIAL
MANAGEMENT?
1.Better Decision Making
It collects and provides all financial
information regarding the
organization. Easy availability and
accessibility of all information help
managers in taking decisions
efficiently on the bases of facts and
figures.
2.Transparency Of Information
It records all information
systematically and made it available
to all business users.
3.Finance Control
It supervises and manages all
activities of the business to exercise
financial control. Finance managers
ensure that all activities of business
go in accordance with the estimated
cost and should not go above the pre-
set budgets.
4. Enhances Managerial Efficiency
It ensures that all financial
resources are efficiently utilized and
there is no wastage. Financial
managers supervise the activities of
all employees and work at deriving
better results out of them.
Effective financial management
allows for the correct balance
between risk and profit
maximization.
5.Profit Maximization And
Wealth Maximization
It aims at earning high
profits by reducing the cost
of operation and efficiently
utilizing all resources.
6.Determines Adequate
Capital
Estimation of an adequate
amount of capital that a
business requires to start and
continue its activities is an
important task.
7.Avoids Debts
Financial management
helps in avoiding and taking
any unnecessary debt by the
company. It aims at the
proper and efficient
application of all funds and
aims at reducing the overall
cost. This leads to avoiding
any need for additional funds
requirements by the
business.