This document provides an introduction to financial management. It defines key terms like finance, business finance, and financial management. It outlines the main concepts in finance including the different types of organizations that require finance. It also describes the objectives and functions of financial management in a business, including acquiring funds, utilizing funds efficiently, and maximizing profitability and firm value. The document explains the importance of financial planning and identifies some principles and factors to consider for sound financial planning.

1. INTRODUCTION TO FINANCIAL
MANAGEMENT
Vedapradha.r

2. MEANING
Meaning : Finance refers to the provision of
money at the time when it is required.
Business finance: It refers to the funds required to carry out
the business activities in an organization.
 Sole proprietary finance
 Partnership firm’s finance
 Company or corporation finance

3. CONCEPTS OF FINANCE
FINANCE
Govt Institutions
State government
Local/Municipal
body
Central
government
Personal finance
Business finance
Finance of non-
profit
organizations
Public
Finance
Private
Finance

4. FINANCE FUNCTION
It refers to the core element of a
business firm which helps in bringing
co-ordination between the various
activities in an organization.

5. APPROACHES to finance function
• Focus on acquiring
funds from financial
sources
• Profits
TRADITIONAL
• Focus on acquiring
funds as well as
effective & efficient
management
• Profits & Wealth
MODERN

6. AIMS OF FINANCE FUNCTION
Acquiring sufficient funds
Proper utilization of funds
Increasing profitability
Maximizing firm’s value

7. ORGANIZATION STRUCTURE OF FINANCE DEPARTMENT

8. FINANCIAL MANAGEMENT
 Financial management : It refers to the
process of planning, organizing, directing,
coordinating & controlling of financial
resources.

9. OBJECTIVES / GOALS of Financial
management
Profits
maximization
Wealth
maximizatio
n
Objectives of
Financial
management

10. Financial DECISIONS
Financial
Decisions
Investment
decisions
Financing
decisions
Dividend
decisions

11. ROLE OF A FINANCIAL MANAGER
 Financial forecasting & planning
 Acquisition of funds
 Investment of funds
 Helping in valuation decisions
 Maintain proper liquidity
 Management of cash, receivables & inventory
 Disposal of surplus
 Performance evaluation & Financial control

12. FINANCIAL PLANNING
 Meaning: It involves the
determination of objectives,
policies & procedures relating to
the finance function.
 It focus on creating a framework
within which an organization is
expected to operate.
 It estimates the amount of capital
required.

13. STEPS IN FINANCIAL PLANNING

14. PRINCIPLES OF SOUND FINANCIAL PLANNING
 Simplicity
 Clear cut objectives
 Less dependence on external
sources
 Flexibility
 Solvency & Liquidity
 Cost
 Profitability

15. FACTORS INFLUENCING SOUND
FINANCIAL PLAN
Nature of industry
Standing of the concern
Future plans
Availability of sources
Economic conditions
Government control