Q.

Discuss the scope and objectives of financial management

Answer as follows
Scope of Financial Management:

Financial management is concerned with the proper control and management of the financial
resources of an organization. It involves the planning, organizing, directing, and controlling of
all financial activities and resources to achieve the organization's goals and objectives.

The scope of financial management encompasses a wide range of activities, including financial
planning, financial analysis, financial decision-making, financial risk management, and financial
reporting. It involves the management of cash, credit, investments, and other financial assets to
achieve the organization's strategic objectives.

Objectives of Financial Management:

The primary objectives of financial management are as follows:

1. Maximizing Profits: One of the primary objectives of financial management is to
maximize the profits of the organization. This involves making informed financial
decisions that will result in increased revenues and reduced expenses.
2. Ensuring Financial Stability: Another objective of financial management is to ensure the
financial stability of the organization. This involves managing the organization's financial
resources in a way that ensures its ability to meet its short-term and long-term financial
obligations.
3. Maintaining Liquidity: Financial management also aims to maintain the organization's
liquidity by managing its cash flow and investments. This involves ensuring that the
organization has enough cash on hand to meet its short-term financial obligations while
also investing its surplus funds in a way that maximizes its returns.
4. Reducing Financial Risks: Financial management also involves managing financial risks.
This includes identifying and mitigating financial risks, such as credit risks, market risks,
and operational risks, to ensure the organization's financial stability and maximize its
returns.
5. Compliance with Regulatory Requirements: Another objective of financial management
is to ensure compliance with regulatory requirements. This involves adhering to financial
regulations and laws, such as the Sarbanes-Oxley Act and the Dodd-Frank Act, to ensure
the organization's financial integrity and avoid legal and regulatory consequences.