Financial Management means planning, directing ,organizing and controlling the financial activities such as procurement and utilization of funds of the enterprise, which means applying general management principles to financial resources of the enterprise.
Elements :- Investment decisions includes investment in fixed assets.Investment in current assets are also a part of investment decisions
Financial decisions :- They relate to the raising of finance from various resources which will depend upon decision on the period of financing,type of source,cost of financing and the returns thereby.
- Estimation of the capital requirements.
- Determining capital compositions.
- Choice of sources of funds.
- Investment funds.
- Disposal of surplus.
- Management of cash.
- Financial controls.
- To ensure regular and adequate supply of funds to the concern.
- To ensure adequate returns to the shareholders which depend on the earning capability, market price of the share, expectations of the shareholders?
- To ensure optimum funds utilization. Once as the funds are received, they should be utilized in maximum possible way at optimal cost.
- To plan a sound capital structure-There should be sound and fair composition of capital so that a balance is maintained between debt and equity capital.