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Financial Management
Financial Management can be defined as the management of the finances of a business/organization in order to achieve financial objectives. By Financial Management we mean efficient use of economic resources namely capital funds. Financial management is concerned with the managerial decisions that result in financing of short term and long term credits for the firm. Here it deals with the situations that require selection of specific assets, or a combination of assets and the selection of specific problem of size and growth of an enterprise. In short, Financial Management deals with Procurement of funds and their effective utilization in the business. As funds can be procured from multiple sources so procurement of funds is considered an important problem of business concerns. Funds obtained from different sources have different characteristics in terms of potential risk, cost and control. Funds issued by the issue of equity shares are the best from risk point of view for the company as there is no question of repayment of equity capital except when the company is liquidated. From the cost point of view equity capital is the most expensive source of funds as dividend expectations of shareholders are normally higher than that of prevailing interest rates.Financial management constitutes risk, cost and control. The cost of funds should be at minimum for a proper balancing of risk and control. In the globalised competitive scenario, mobilization of funds plays a very significant role. Funds can be raised either through the domestic market or from abroad. Foreign Direct Investment (FDI) as well as Foreign Institutional Investors(FII) are two major sources of raising funds. The mechanism of procurement of funds has to be modified in the light of requirements of foreign investors. In the field of financing there are multiple methods to procure funds. Funds may be obtained from long term sources as well as from short term sources. Long term...