Financial Management

Meaning The financial management means: To collect finance for the company at a low cost and To use this collected finance for earning maximum profits. Thus, financial management means to plan and control the finance of the company. It is done to achieve the objectives of the company. Scope of Financial Management Financial management has a wide scope. According to Dr. S. C. Saxena, the scope of financial management includes the following five A's. Anticipation: Financial management estimates the financial needs of the company. That is, it finds out how much finance is required by the company. Acquisition: It collects finance for the company from different sources. Allocation: It uses this collected finance to purchase fixed and current assets for the company. Appropriation: It divides the company's profits among the shareholders, debenture holders, etc. It keeps a part of the profits as reserves. Assessment: It also controls all the financial activities of the company. Financial management is the most important functional area of management. All other functional areas such as production management, marketing management, personnel management, etc. depends on Financial management. Efficient financial management is required for survival, growth and success of the company or firm. Share This: