Introduction to Financial

Management:

Financial Environment
What Is Financial
Management?
The practice of handling a company’s finances hence allowing it to be successful and in compliance with regulations.

A managerial activity that is concerned on the planning and controlling the firm’s financial resources.

“Financial management is concerned with the efficient use of an important economic resource, namely, capital
Solomon
funds.”

“Financial management is the operational activity of a business that is responsible for obtaining and effectively
J. L. Massie
utilizing the funds necessary for efficient operation.”

Weston & Brigham “Financial management is an area of financial decision making harmonizing individual motives & enterprise goals.”

Howard & Upton “Financial management is the application of the planning & control functions of the finance function.”

“Financial management is the area of business management devoted to the judicious use of capital & careful
J. F. Bradley
selection of sources of capital in order to enable a spending unit to move in the direction of reaching its goals.”
Financial Environment

gers
a
an
ia lM
a nc
Fin

rkets
a
cial M
Financial
Environment

Finan
Inv
est
ors
Inv
est
ors
Financial Environment
Roles of Financial Managers

gers  Maximize profit.

a
an
ia lM  Maximize profit.
a nc  Liquidity and cash flow tracking.
Fin
 Interpret cash flow.

rkets
 Ensures business is in

a
compliance.

cial M
Financial  Deals with investors and board
Environment of directors relationship

Finan
 Oversee financial health of the
organization.
Inv  Performs financial decision
est
ors making and planning
Inv
est (forecasting).
ors
 Provide reports on financials.
Financial Environment
Roles of Financial Markets

gers Maximize
Transfer profit.
funds from those who
a
an
ia lM has funds to those needing
a nc funds.
Fin
 Act as facilitator on the flow of

rkets
funds among investors, firms,
government unit and agencies.

a
cial M
Financial  Performs price determination
Environment via setting the price for both

Finan
newly issued financial assets
and with the existing one.
Inv  Plays a critical roles in allocating
est
ors the limited resources in the
Inv
est economy that are deem
ors
available in any country via
acting as the intermediary
between savers and investors.
Financial Environment
Roles of Investors Investors

gers
a
an
ia lM  Commits capital or finance the
a nc organization that expects
Fin
financial returns.

rkets
 It could be an individual or an
organization giving money or

a
cial M
Financial funds to another person or
Environment organization hoping to see or

Finan
receive future profit.

Inv
est
ors
Inv
est
ors
Thank you!!!