Roles and Objectives of Financial Management Essay

632 Words Jun 29th, 2012 3 Pages
Financial Management: Roles and Objectives

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|1. Planning |Identify and Manage Risks |
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|2. Organizing |Adequate supply of funds |
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|3. Directing |Adequate returns to shareholders |
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Financial management has a role within the overall context of general management. The scope/elements of financial management are making investment, financial, dividend decision for an enterprise to survive. Finance is needed to promote or establish the enterprise, acquire fixed assets, make investigations such as market surveys. By developing product, keep men and machine at work encourages management to make progress and create values. The financial management is generally concerned with procurement, allocation and control of financial resources of an enterprise. These types of objectives are carried out within the United States financial system. The first object of financial management is to identify and manage risks. A finance manager has to make estimation with regards to capital requirements of the company. This will depend upon expected costs and profits and future programs and policies of a concern. Estimations have to be made in an adequate manner which increases earning capacity of enterprise. Second objective is to ensure regular and adequate supply of funds (Moyer, McGuigan, Rao & Kretlow, 2012). Third objective is to ensure adequate returns to the shareholders which depend upon the earning capacity, market price of the share and expectations of the shareholders. The net profits decision has to be made by the finance manager and this can be done in two ways: Dividend declaration is identifying the rate of dividend and

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