Financial Management means the efficient and effective management of money (funds) in such a manner as to accomplish the objectives of the organization. It is the specialized functions directly associated with the top management. The significance of this function is not only seen in the 'Line' but also in the capacity of 'Staff' in overall administration of a company. It has been defined differently by different experts in the field.
It includes how to raise the capital, how to allocate it i.e. capital budgeting. Not only about long term budgeting but also how to allocate the short term resources like current assets. It also deals with the dividend policies of the share holders.
Definitions of Financial Management
“Financial Management is the Operational Activity of a business that is responsible for obtaining and effectively utilizing the funds necessary for efficient operation.” by Joseph Massie
“Business finance deals primarily with rising administering and disbursing funds by privately owned business units operating in non-financial fields of industry.” – by Prather and Wert
“Financial Management is an area of financial decision making, harmonizing individual motives and enterprise goals.” By Weston and Brigham
“Financial management is the area of business management devoted to a judicious use of capital and a careful selection of sources of capital in order to enable a business firm to move in the direction of reaching its goals.” – by J.F.Bradlery
“Financial management is the application of the planning and control function to the finance function.” – by Archer & Ambrosio
“Financial management may be defined as that area or set of administrative function in an organization which relate with arrangement of cash and credit so that organization may have the means to carry out its objective as satisfactorily as possible .“ - by Howard & Opton.
Business finance can be broadly defined as the activity concerned with planning, raising,