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Scope of Financial Management

The scope of financial management involves arranging sufficient finances to meet short and long term needs at minimum cost to maximize profitability. The finance manager concentrates on financial estimation, capital structure planning, selecting the right sources of funds, investing funds by evaluating profitability of projects, analyzing financial performance, planning profits, and ensuring liquidity to maintain borrowing capacity.

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385 views11 pages

Scope of Financial Management

The scope of financial management involves arranging sufficient finances to meet short and long term needs at minimum cost to maximize profitability. The finance manager concentrates on financial estimation, capital structure planning, selecting the right sources of funds, investing funds by evaluating profitability of projects, analyzing financial performance, planning profits, and ensuring liquidity to maintain borrowing capacity.

Uploaded by

sanathchamp
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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SCOPE OF

FINANCIAL
MANAGEMENT
Presented by:
Nethravathi
lakshmi

The primary objective of a finance


manager is to arrange sufficient finances
in order to meet the short term long term
needs
the funds are procured at minimum
costs so that the profitability of the
business is maximized

The finance manager should basically concentrate


1. Financial estimation
estimation of finance should be such that there should
Neither be inadequate nor excess funds with the concern
because both the situation would be dangerous for the concern

2. Planning of the capital structure


The processes involving deciding about the quantum of funds
and also The type of securities to raise the funds .
The organization should choose long term debts for financing
fixed assets And over drafts and cash credits should be selected for
financing working Capital requirements

3.

Selecting right source of funds

In market finance is available in different forms like


shares ,debentures, Financial institution ,
commercial banks, public deposits etc
It funds are needed for short period then
financial executor should choose Banks financial
institutions etc

Investment of funds
It is the responsibility of the finance
manager
To allocate or invest the funds towards capital
expenditure and revenue expenditure
before making the final decision the
profitability of each project has to be
evaluated by the finance manager

Analyzing the financial


performance

After the investment of funds in different


investment proposal the performance of
each proposal has to be measured

Planning of profit
Profit earning capacity of an organization
speaks about the efficiency levels of
organization
profit earning capacity enables future
expansion and diversification programs of
the company
It is the prime responsibility of the finance
manager to plan the profit

Ensuring liquidity

It is the another responsibility of a finance


manager is to ensure liquidity of the
organization as it is directly by related to
the borrowing capacity of the company

Question ?????????

Thank you

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