Understanding the roles of Financial Management

It is very pertinent that we learn and understand how to manage our finances. Failure to manage finances appropriately may leave one in debts and/or bankruptcy. But a proper financial management will only lead to funds increment.

Financial management which can also be said to be managerial finance or corporation finance is simply a part of the total management function which is concerned with the effective and efficient raising and utilization of funds to ensure that the corporate goals and objectives are attained within the shortest possible time.

More so, the primary responsibility of financial management is to study the financial activities of the corporation from its inception as well as monitoring its growth. This is in clear recognition of the fact that the growth process of a firm is characterized by a myriad of problems ranging from acquisition, maintenance and replacement of fixed assets, management of accounting problems, the issue of cost of capital provided by financial institutions and other institutional and individual investors, capital structure, etc.

Furthermore, in a time when economy becomes unpredictable and there is inflation and deflation, fluctuating interest rates, painful shortages and excesses, the financial manager must maintain the financial viability of the firm. In the face of internationalized financial markets in which huge amounts of capital movevery freely from one country to another, the financial manager must have the global affairs of the firm and be able to react swiftly to changing foreign exchange rates.

Also, the chief executive officer and board of directors look to the financial management to provide the precious financial resource and manage it efficiently and profitably. There are many other functions and roles a financial manager has to play and there are very critical.

Posted Using LeoFinance