What is the significance of financial management

In its normal operations, a company provides a product or service, makes a sale to its customer, collects the money and starts the process over again. Financial management is moving cash efficiently through this cycle.

This means that managing the turnover ratios of raw materials and finished goods inventories, selling to customers and collecting the receivables on a timely basis and starting over by purchasing more raw materials. In the meantime, the business must pay its bills, its suppliers and employees.

All of this must be done with cash, and it takes astute financial management to make sure that these funds flow efficiently. Even though economies have a long-term history of going up, occasionally they will also experience sharp declines. Businesses must plan to have enough liquidity to weather these economic downturns, otherwise they may need to close their doors for lack of cash. Every business is responsible for providing reports of its operations.

Shareholders want regular information about the return and security of their investments. Improve interpersonal skills: Doing a course in this field will allow you to build better communication and teamwork skills through developing relationships with your colleagues. Builds personality: Doing a course in this field also helps in improving your soft skills. This is because people who wish to work in this sector must be extroverts, and should be able to talk about finance for hours altogether.

This helps in improving their personality, knowledge, and communication. Higher salary packages: People working in this sector are usually paid very well, whether it is at the entry level or at the management level. Additionally, this is a highly skilled job role that is always in demand, even during recessions. Career growth: There is always an opportunity to develop your professional skills and climb the career ladder. You can quickly acquire in-depth knowledge of financial management systems and financial management software once in this field.

If you possess this knowledge and great aptitude skills, this field is perfect for you. Scope of studying Financial Management Doing a management course related to finance or gaining a finance degree offers excellent career opportunities.

Take a look at some of these diverse career options: Corporate manager; Investment banker; Financial advisor; Financial analyst; Financial examiners; Financial managers; Personal financial planners; Budget analysts; Investor relations associate or executive; Credit analyst. Nelson Mandela. If you really look closely, most overnight successes took a long time.

Steve Jobs. Opportunities don't happen. You create them. Chris Grosser. How does your AAT course work? Once you have learned and taken good knowledge on financial management, this will not only provide you financial stability and peace of mind but also it will improve your standard of living.

Your economic growth will transform into better standard of living. Importance of financial management in an organization in the area of enlarging the variety of speculators and the business concern.

Extreme point concerning of any business is that they will achieve maximum gain with greater efficiency. It may be related to increasing production or expanding business to other countries. A great management and financial specialists can assist in improving valuation of any company.

Your financial planning should also include your tax planning. When failing to plan your taxes appropriately, it will lead you spend more out of your pocket. For example: If you can analyze that current fiscal year you will be spending less on taxes but in next year you are more likely to pay heavy taxes then you should manage your budget and saving accordingly.

This will help you towards economic growth else you may run out of cash and may lead in disturbance in your investment decisions.

Money have always been imaginable and possible really when the business earning rises to higher levels and expansion arises. Here is an importance of financial management in success of business by ways of expanding as well as creating capital reserves in the book of companies accounts. Think of importance of financial management points as mentioned above will benefit you in many ways.

It will provide you financial stability, improve your standard of living, give you peace of mind and keep you financially stress free. It is highly recommended that you should start thinking of financial management when you can see how many benefits you get from it.

This involves short- term and long- term debt equity analysis. This will depend upon the proportion of equity capital a company is possessing and additional funds which have to be raised from outside parties.

Choice of sources of funds: For additional funds to be procured, a company has many choices like- Issue of shares and debentures Loans to be taken from banks and financial institutions Public deposits to be drawn like in form of bonds. Choice of factor will depend on relative merits and demerits of each source and period of financing. Investment of funds: The finance manager has to decide to allocate funds into profitable ventures so that there is safety on investment and regular returns is possible.

Disposal of surplus: The net profits decision have to be made by the finance manager. This can be done in two ways: Dividend declaration - It includes identifying the rate of dividends and other benefits like bonus. Retained profits - The volume has to be decided which will depend upon expansional, innovational, diversification plans of the company. Management of cash: Finance manager has to make decisions with regards to cash management.