Business Ideas And Marketing
No Result
View All Result
Friday, December 1, 2023
  • Login
  • Register
  • Home
  • Business Ideas
  • Marketing Management
  • Banking
  • Investment
  • About Us
    • Contact Us
    • Privacy Policy
    • Terms and Conditions
    • Disclaimer
    • DMCA Copyright
Follow
Business Ideas And Marketing
  • Home
  • Business Ideas
  • Marketing Management
  • Banking
  • Investment
  • About Us
    • Contact Us
    • Privacy Policy
    • Terms and Conditions
    • Disclaimer
    • DMCA Copyright
No Result
View All Result
Business Ideas And Marketing
No Result
View All Result
  • Home
  • Business Ideas
  • Marketing Management
  • Banking
  • Investment
  • About Us
Home Marketing Management

Explain the Nature and Scope of Financial Management

June 22, 2022
in Marketing Management
0
Share on FacebookShare on Twitter

Scope of financial management is that Finance is the workmanship and study of handling cash and this administration refers to the administration of accounts. It is the successful and effective use of monetary assets.

Table of Contents

  • Definition of Financial Management
  • What is The Nature of Financial management?
  • What is The Scope of Financial Management?
    • 1. Analyze the Needs of Finance
    • 2. Decide the Capital Structure
    • 3. Selecting the sources of Finance
    • 4. Selecting the Pattern of Investment
    • 5. Cash Management
    • 6. Proper Finance Control
    • 7. Proper Use of Profit
    • 8. Estimation of Financial management
      • ⦿ Decision Regarding optimal capital structure
      • ⦿ Selection Of Source of finance
      • ⦿ Maintainance Liquidity
      • ⦿ Easy availability of funds
      • ⦿ Optimal use of funds
  • What are The Financial Management Decisions?
    • ① Financial Decisions
    • ② Investment Decisions
    • ③ Dividend Decisions
  • What are The Approaches to Finance Function?
    • What is the role of the Traditional Approach
    • What is the Role of the Modern Approach
  • What Are The Functions of financial management
  • What are the Objectives of Financial Management?
  • What is The Financial management assuming Two Objectives?
    • Profit Maximisation
    • Wealth Maximisation
  • FAQ [frequiently Asked Question]
    • What is the scope of financial management?
    • What is the nature and scope of financial management?
    • What are the 3 scopes of financial management?
    • What are the scope and objectives of financial management?
    • What are the functions of financial management?
    • What are the 7 functions of financial management?
    • What are the main objectives of financial management?
  • Related Term
  • Summary & Conclusion

Definition of Financial Management

Estimation of Financial management
Estimation of Financial management: istockphoto

Finance is the art and science of managing money and that management refers to the management of finances. It is the effective and efficient use of financial resources.

It creates a balance between financial planning, fundraising, profit management, and sources of funding.

That means Financial management is basically that we manage our financial resources inside it. Like where should we invest, from where we will get good returns, all things are concerned inside the decision making, that is financial management.

In the definition of the nature and scope of financial management, I am telling you below how it does its works.

What is The Nature of Financial management?

Estimation of Financial management
Estimation of Financial management
  • It is an integral part of overall management
  • The central Focus is the Valuation of the Firm
  • Acquiring sufficient funds
  • Involves risk-return trade-off decisions
  • Affect the survival, vitality, and growth of the firm
  • It is a subsystem of the business system.
  • Proper utilization of funds

What is The Scope of Financial Management?

Scope of Financial management
Scope of Financial management

⦿ There are many points in the Scope of Financial Management, which I will describe one by one:

1. Analyze the Needs of Finance

  • Long-term and Short-term Sources of Finance
  • The Important Departments in business are Finance, Production, Marketing, HRM
  • Whether the firm needs the finance to finance their daily activities or to finance their fixed assets
  • Sometimes the business needs the finance to manage the fixed assets or the business needs to secure the funds which are required for day-to-day activities
See also  How To Use Rural Marketing Strategies To Increase Your Business Growth

2. Decide the Capital Structure

  • What Proportion of Finance is required for taking the finance, the firm also has to give some securities.
  • What type of funds are Required-Borrowed Funds or Equity funds
  • Whether it is taken for the long-term, it should also help the firm in short term partially

3. Selecting the sources of Finance

  • If a firm needs the finance for a Short time, then what finance sources are needed
  • If depend on firm needs the finance for the Long-term, then will it be the Equity Shares, Preference Shares, Debentures, etc
  • Ideally, the firm should maintain the Capital Structure in the middle of both the finance sources.

4. Selecting the Pattern of Investment

  • How many funds will be used for the day-to-day operations of the business?
  • How many funds will be used to purchase the fixed assets?
  • How many Funds will be used for the Tangible Real Assets-Furniture, buildings, etc. and Intangible assets like Trademark, Patents, Copyrights, etc

5. Cash Management

Where the Cash usually required for the business

  • Purchasing of Raw Material
  • Transportation Charges
  • Payment to the Creditors, Suppliers, etc

6. Proper Finance Control

  • Return on Investment (ROI)
  • Break-Even Analysis
  • Ratio Analysis
  • Cost Control

7. Proper Use of Profit

  • After paying the interest and dividends to the Debentures Shareholders, some portion of the profit is retained for the uncertain future

8. Estimation of Financial management

That is, how much do I need in my funds, that is, how much funds are required in my business, to estimate how much I need funds.

If I want to do this work then I need these funds so much, if I want to invest short team then I need funds, or will I invest for the long term then I need this much.

The process of estimating all of this is the Estimation of Financial Management:

⦿ Decision Regarding optimal capital structure

Capital structure is the proportion of different securities used for financing the operation of the business. financial management various decisions for the optimal capital structure

⦿ Selection Of Source of finance

There are many sources of finance such as Shares, Debentures, etc.

Financial management is concerned with the selection of the best source of finance

⦿ Maintainance Liquidity

Liquidity refers to adequate cash available in business every time to meet the day-to-day needs of concern. Financial management involved maintaining liquidity in business for smooth running

⦿ Easy availability of funds

Financial management is easily available for funds. The management ensures that funds should be available whenever needed arises.

⦿ Optimal use of funds

Financial Control aims to optimum use of funds by maintaining the balance between liquidity and solvency

See also  Which one of the following activities does application management perform?

What are The Financial Management Decisions?

⦿ We will read mainly Three things in financial management are:

The Nature and scope of financial management
  1. Financial Decisions
  2. Investment Decisions
  3. Dividend Decisions

① Financial Decisions

A finance Decision refers to a decision about the best sources of finance. It means choosing or selecting the best source of finance for the raising of finance for the short-term or long-term. It must ensure the easy availability of funds.

  • Funds Required
  • Capital Structure

② Investment Decisions

Investment decisions, Where to invest. It refers to investing funds in short-term and long-term assets.

(b) Short-term investment decisions:- short term investment decisions it also called working capital decisions. it refers to investing in current assets.

  • Capital Budgeting
  • Working Capital Management

③ Dividend Decisions

Dividend Decisions refer to decisions about how much finance is distributed to shareholders and how much is retained in the business for a long period to meet any uncertainly

  • Dividend Policy
  • Retained Earnings

What are The Approaches to Finance Function?

Nature and Scope of Financial Management
Nature and Scope of Financial Management

⦿ There are two approaches to the finance function

  1. The Traditional Approach
  2. The Modern approach

What is the role of the Traditional Approach

We Know the Tradition Approach as “Corporate Finance” Traditional Approach Under the traditional approach, The main concern is to fundamentals of corporate finance enterprises to raise and administer the funds,

In this, financing is required for episodic-like incorporation, merger, acquisition, promoting, etc.

⦿ Limitation of its:

  • Narrow Sense
  • The outsider looking in approach
  • Focus on only procurement of funds
  • Ignored allocation of funds
  • No importance to routine financial problems
  • Checks the viewpoint of only External Financing members
  • Finance is taken for only Episodic events
  • Focus on long-term finance

What is the Role of the Modern Approach

Focus on procurement as well as effective utilization of funds, Covers financial planning, raising of funds, allocation of funds, financial control, etc.

This modern approach to financial management is concerned with three decisions.

⦿ Considers three basic management decisions

  • Investment decision
  • Financing decision
  • Dividend decision

What Are The Functions of financial management

Video Source: College Tutor
  1. Determining the financial needs
  2. Selecting the source of funds
  3. Financial analysis and interpretation
  4. Capital budgeting
  5. Cost Volume profit analysis
  6. Profit Planning and control
  7. Dividend policy

What are the Objectives of Financial Management?

Financial can have very objectives but broadly it assumes objectives that mean, Every business has an objective function that it should grow maximum profit.

Objectives of Financial Management
Objectives of Financial Management
  • Maximization of profits
  • Maximization of shareholders’ wealth
  • a regular and adequate supply of funds
  • Optimum funds utilization
  • Plan a sound capital structure
  • Safety of funds

What is The Financial management assuming Two Objectives?

Financial management assuming Two Objectives
Financial management assuming Two Objectives
  1. Profit Maximisation
  2. Wealth Maximisation

Profit Maximisation

  • Primary Objectives of any Business
  • Each and every decision to be taken after considering the effect on profit
  • It cannot be a sole objective but a limited objectives
See also  The primary focus of strategic management is

Problems with profit maximization as Objective

Wealth Maximisation

  • The primary goal should be maximizing value
  • Increase the net present value of economic profits or firm
  • Wealth Maximisation considers time value and risk aspects

Investors invest in a company to make a return and it is possible if the value of a share goes up

FAQ [frequiently Asked Question]

What is the scope of financial management?

There are many points in the Scope of Financial Management, which I will describe someone by one is ①.Estimation of Financial management ②.Decision Regarding optimal capital structure ③.Selection Of Source of finance and more…

What is the nature and scope of financial management?

Nature of Financial Management, It is an integral part of overall management
The central Focus is the Valuation of the Firm
Acquiring sufficient funds
Involves risk-return trade-off decisions and more…


What are the 3 scopes of financial management?

We will read mainly Three things in financial management, that is 1. Financial Decisions
2. Investment Decisions
3. Dividend Decisions

What are the scope and objectives of financial management?

Scope:- Long-term and Short-term Sources of Finance
The Important Departments in business are Finance, Production, Marketing, HRM

What are the functions of financial management?

The financial requirement of the company, how much money is needed for the stock of my company, how much money is needed for working, this whole thing is a concern with financial management

What are the 7 functions of financial management?

① Determining the financial needs
How much is the financial requirement of the company, how much money is needed for the stock of my company, how much money is needed for working, this whole thing is a concern with financial management
② Selecting the source of funds
Where to take money from, such as from which organization sector or whether to take it from the bank or borrow from friends

What are the main objectives of financial management?

The business has an objective function that it should grow maximum profit.

Related Term

  • What is commodity market?
  • Market niche example
  • How to Write Business Plan?
  • Google Finance Stock Screener
  • What is Finance Management?
  • Finance Wheels And Tires
  • Who Biomedical Waste Management?
  • How do management buyouts work?
  • What Are Business Management Jobs?
  • What is Yield Management in Front Office?
  • What is Management Quota in Mbbs?
  • What is Financial Strategy | Financial Management
  • Who is the principal federal official for domestic incident management?
  • Which Resource Management Task Deploys or Activates Personnel And Resources
  • Which Type of Business Is Strong Steel Manufacturers & Structural Steel
  • How To Start Mustard Oil Business Plan
  • What Is B2k Marketing | B2k Media Marketing?
  • What Is B2k Marketing | B2k Media Marketing?
  • What Type of Agreement Is Used To Form A Partnership Business Partnership Agreement?
  • How Can The Extensibility of A Platform Benefit a Business?
  • How to Market Yourself?
  • What are Finance Charges?
  • What is Nifty Bank Graph?
  • Smart Waste Management
  • What is Business Facebook Manager?
  • The primary focus of strategic management is
  • Why Knowledge Management is Important?
  • Management is What a Manager Does?
  • Which Helps Enable An Oligopoly To Form Within A Market?
  • What is Undifferentiated Marketing | Undifferentiated Marketing Strategy?
  • How To Use Rural Marketing Strategies To Increase Your Business Growth
  • International Marketing Research
  • Features Of International Marketing
  • Functions of Marketing
  • Scope of Marketing Research
  • What do you understand by Surrogate Marketing
  • Marketing Fundamentals
  • 5 Ways to Use How Can Performance Planner Serve Your Business to Achieve Your…
  • Nature And Significance of Management
  • Marketing Intelligence and Planning
  • What Is Service Marketing Triangle

Summary & Conclusion

So you must have understood by looking at so, the scope of financial management, the nature and the scope of financial management, the scope and objectives of financial management, Functions, Approaches, and more than how financial management works and financial management three decisions take like,

⦿ Financial management three decisions take like,

  • Financial Decisions
  • Investment Decisions
  • Dividend Decisions

And all these points come under the scope of financial management.

‣ I hope friends, through this article, I have given you information about The Nature and Scope of Financial Management You must have got the information. So share your suggestions with us.

Like this information Or have something to share!

Connect with us on Facebook

Share this:

  • Share
  • Twitter
  • Facebook
  • LinkedIn
  • Reddit
  • Tumblr
  • Pinterest

Like this:

Like Loading...
Tags: marketing management
ShareTweetShareSendPin
Businessideasfor

Businessideasfor

I am Ranjeet, the admin of this site and I give my users some Information ideas related to business ideas, banks, investments, or others.

Category

  • Business Ideas
  • Marketing Management
  • Learning
  • Banking
  • Investment
  • Trending
  • Comments
  • Latest
how can the extensibility of a platform benefit a business?

How Can The Extensibility of A Platform Benefit a Business?

December 2, 2022
What Is The Core Function of An Enterprise Platform?

What Is The Core Function of An Enterprise Platform?

September 13, 2022
An Online Retailer is Looking To Implement An Enterprise Platform

An Online Retailer is Looking To Implement An Enterprise Platform

September 15, 2022
All of The Following Are Steps in Derivative Classification Except

All of The Following Are Steps in Derivative Classification Except

August 24, 2022
Business Ideas with low investment

[Best] 10 Ways Improves the flow of business ideas With Low Investment

0
Most Important Features of eCommerce

Most Important Features of eCommerce

0
Future Scope of ecommerce

Future Scope of ecommerce | functions of e commerce Fulfillment

0
Scope of e business

Scope of ebusiness | Features of e business

0
scope of financial management

10 Lucrative Business Ideas in Marathi in 2023

July 23, 2023
scope of financial management

MSME Business Ideas: A Guide to Starting Your Own Micro, Small, or Medium-Sized Enterprise

July 17, 2023
On July 14, 2023, India successfully launched the Chandrayaan 3 mission, a lunar exploration mission that aims to soft-land a lander and rover on the Moon's surface. The mission is a follow-up to the Chandrayaan 2 mission, which was India's first attempt to land on the Moon. However, Chandrayaan 2's lander crashed during the final descent phase, so Chandrayaan 3 is seen as a chance for India to redeem itself and achieve its goal of becoming the fourth country to land on the Moon. In addition to the scientific and technological challenges, the Chandrayaan 3 mission also has significant business and financial implications. The project has cost an estimated ₹600 crore (US$75 million), which has been funded by the Indian government. However, there is also the potential for significant commercial partnerships, as businesses from around the world could provide equipment and services for the mission. The Cost of the Mission The Chandrayaan 3 mission has cost an estimated ₹600 crore (US$75 million). This includes the cost of the spacecraft, the launch vehicle, and the ground support infrastructure. The cost of the spacecraft is the largest component of the project, at around ₹400 crore (US$50 million). The launch vehicle, the GSLV Mk III, is a new rocket that was developed specifically for the Chandrayaan 3 mission. The ground support infrastructure includes the launch pad, the tracking stations, and the data analysis centers. The Potential for Commercial Partnerships There is also the potential for significant commercial partnerships in the Chandrayaan 3 mission. Businesses from around the world could provide equipment and services for the mission, such as cameras, sensors, and software. This could generate significant revenue for the Indian space industry, and it could also help to attract foreign investment. The Long-Term Economic Impact The Chandrayaan 3 mission has the potential to generate significant economic benefits for India in the long term. The mission could lead to the development of new technologies and industries, and it could also help to boost the country's tourism sector. In addition, the mission could improve India's international standing and prestige. Conclusion The Chandrayaan 3 mission is a significant event for India, and it has the potential to generate significant economic benefits for the country. The mission will require a significant investment of public funds, but it could also lead to the development of new technologies and industries. The long-term economic impact of the mission is still uncertain, but it has the potential to be significant.

Chandrayaan 3: The Business and Money Behind India’s Moon Mission Launch

July 15, 2023
Where Can You Find TCS Process for Business Continuity Management?

Where Can You Find TCS Process for Business Continuity Management?

July 11, 2023

Premium Content

  • how can the extensibility of a platform benefit a business?

    How Can The Extensibility of A Platform Benefit a Business?

    0 shares
    Share 0 Tweet 0
  • What Is The Core Function of An Enterprise Platform?

    0 shares
    Share 0 Tweet 0
  • An Online Retailer is Looking To Implement An Enterprise Platform

    0 shares
    Share 0 Tweet 0
  • All of The Following Are Steps in Derivative Classification Except

    0 shares
    Share 0 Tweet 0
  • What is Enterprise Platform?

    0 shares
    Share 0 Tweet 0

Latest Post

scope of financial management

10 Lucrative Business Ideas in Marathi in 2023

July 23, 2023

MSME Business Ideas: A Guide to Starting Your Own Micro, Small, or Medium-Sized Enterprise

Chandrayaan 3: The Business and Money Behind India’s Moon Mission Launch

Where Can You Find TCS Process for Business Continuity Management?

Business Model of UPSC : A Sale of Dream to Youth

The Making of a Magical Success: The Harry Potter Film Series

About Site

Welcome to businessideasfor.com, On this site, you can get any Online help that you need. Mainly if you struggle in your small business career then the businessideasfor.com site helps you to provide knowledge to improve your career in business and marketing.

Policy Page

  • About Us
  • Clients Portal
  • Contact Us
  • Disclaimer
  • DMCA Copyright
  • Privacy Policy
  • Terms and Conditions

Admin

Welcome to businessideasfor.com’s Read below to know all details of the website like What is the Website Aim? and also, know All Details of the Admin and the Admin's Point of View to create this website.

Our Aim

  1. I help people make a piece of knowledge about business and marketing from our blogs

© 2023 businessideasfor.com

No Result
View All Result
  • About Us
  • Clients Portal
  • Contact Us
  • Disclaimer
  • DMCA Copyright
  • Privacy Policy
  • Terms and Conditions

© 2023 businessideasfor.com

Welcome Back!

Login to your account below

Forgotten Password? Sign Up

Create New Account!

Fill the forms below to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In
%d bloggers like this: