3.1 Role of Financial Management Flashcards
What is the role of Financial management?
Financial management refers to the planning, organising and controlling of the financial resources.
what does the ability to manage financial resources contribute to?
The ability to financially manage contributes to the profit, return on investment, growth and expansion of the business. Effective financial planning is a critical success factor for a business.
What is the strategic role of financial management?
The strategic role of financial management is to provide the financial resources to allow the implementation of the business strategic plan.
What does the strategic plan outline?
The strategic plan outlines the goals, objectives and future direction of a business.
What does financial management involve?
Financial management involves determining the financial resources available to implement the strategies necessary to achieve the goals and objectives of a business.
What activities are involved in the strategic management of financial resources?
- Setting policies and procedures regarding cash and credit controls
- Determining the mix of equity and debt finance raising
- Budgeting, including monitoring actual and planned performance
- Record keeping and analysis through the use of financial statements and ratios
- Implementing financial controls
- Taxation management