Intro to Financial Management

Question 1

What is Financial Management?

Answer 1

Financial Management = The identification and implementation of strategies designed to maximize a firm’s value, usually as reflected by the market price for the firm’s stock. (Deals with both short-term and long-term issues).

It includes:

1. Managing the capital and financial structure of the entity;
2. Planning, allocating, and controlling an entity’s financial resources (this includes acquisition as well);
3. Identifying and managing financial risks faced by the entity.

Question 2

What are the Concepts and Tools relevant to Financial Management?

Answer 2

Concepts and Tools Relevant to Financial Management:

1. Concepts of cost;
2. Time value of money and calculations;
3. Interest rate concepts and calculations;
4. Financial valuation and its techniques;
5. Forecasting and its techniques.