in this video you are going to learn financial management topics i have discussed are

what is financial management

objectives of financial management
what does a financial management do or functions of financial management and
types of financial management

let's start the video

financial management refers to the diplomatic planning organizing directing and supervising of
financial undertakings in an organization it also comprises applying management principles to
the financial resources of an organization while also playing a significant part in economic or
budgetary management

there are many options that everyone can use for managing their finances this could

manage them on your own

hire a full-time employee
hire a part-time accountant or a third party who deals with all finance associated activities for
you for example a chartered accountant

usually organizations have an assigned department that looks after the financial involves of the
company a finance manager is appointed to control finance and manage its resources within an
industry they took all decisions related to finance at this position

objectives of financial management

1. to maximize profits by giving insights on for example ascending costs of raw materials that
might trigger a hike in the selling value

2. to secure adequate returns to the shareholders which will depend upon the earning capability
the market value of the share expectations of the shareholders etc

3. to track liquidity and cash flow to ensure the organization has enough money on hand to meet
its requirements

4. to ensure optimum funds utilization once the funds are procured they should be utilized in the
maximum possible way at the least cost five to provide safety on investment that means funds
should be invested in safe ventures so that they can obtain an acceptable rate of return [Music]

6. to plan a sound capital structure there should be a sound composition of capital so that a
balance is maintained between debt and equity capital
what does a financial management do or functions of financial management the financial
department of any organization has to handle numerous functions such as

calculating the required capital the financial manager has to calculate and estimate the amount
of funds an organization requires this depends upon the policies of the firm regarding required
expenses and profits the amount expected has to be determined in such a way that the earning
capability of the organization increases

determining capital structure once the need for capital funds has been decided a decision
regarding the type and proportion of various sources of funds has to be taken for this the
financial manager has to figure out the proper mix of capital and debt and short-term and
long-term capital ratio this is done to obtain the minimum cost of capital and maximize
shareholders wealth

choice of sources of fund before the exact acquisition of funds the finance manager has to
check the sources from where the funds are to be collected the management can raise finance
from different sources like equity investors preference shareholders debenture holders banks
and other financial associations public deposits etc

investing the capital every organization or business requires investing money to raise more
capital and earn regular returns hence the financial manager needs to invest the organization's
funds in secure and effective ventures

procurement of funds the financial manager has to procure the funds required for the
organization it might involve consultation with creditors and financial associations issue of
prospectus etc the procurement of funds is reliant not only on the cost of raising funds but also
on other aspects like the general market situations decisions of investors government policy etc

allocation of profits once the organization has received a decent amount of net profit it is the
financial managers duty to allocate it efficiently this could require keeping a part of the net profit
for an emergency innovation or expansion purposes while another part of the profit can provide
rewards to the shareholders

financial control not only does the financial managers have to plan organize and get funds but
he also has to manage and evaluate the firm's finances in the short term and the long term this
can be done using some financial tools such as financial forecasting ratio evaluation risk control
and profit and cost control

now come to the types of financial management in financial management studies there are
mainly three types of financial management
1. capital budgeting it relates to determining what needs to happen financially for the company
to reach its short-term and long-term objectives where should capital funds be spent to support
growth these management teams are likewise answerable for raising funds and investing funds

2. capital structure figuring out how to pay for operations and growth if interest rates are
reasonable taking on debt might be the best response a company might also seek funding from
a private investment company consider selling assets like real estate or selling capital where
applicable at the point when the team refers to capital structure they are apparently dealing with
a company's debt to equity ratio which gives an understanding of how strong an organization is
financially or how risky the organization is financially

3. working capital management working capital management of an organization deals with

managing bookkeeping methods and accounting policies intended to keep track of current
assets current debts cash flow inventory turnover ratio working capital ratio and much more the
basic task of working capital management is to assure the organization dependably keeps up
adequate liquid cash to meet its short-term debts and operational cost this is one type of
financial management where the team needs to maintain working capital management to
smoother the company's operational cycle and also to increase the company's earnings

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