Financial Management means planning, organizing, directing and controlling the financial activities of the enterprise. In this connection, it is necessary to distinguish between strategic, tactical and operational financial planning. They are part of a continuous process of using your resources intelligently and managing your business for success and growth. Scope 4. Selecting a Pattern of Investment 5. It is important to know the financial management functions of a financial manager to manage resources. Financial management is an organic function of any business. Any organization needs finances to obtain physical resources, carry out the production activities and other business operations, pay compensation to the suppliers, etc. Goals of Financial Management: Goals of financial management should be so articulated as to help achieve the objective of wealth maximization and maximisation of profit pool. Functions of Strategic Financial Management The key decisions falling within the scope of financial strategy include the following: 1. Financing decisions: These decisions deal with the mode of financing or mix of equity capital and debt capital. It helps you to take a decision about financial planning and management using business resources. He distinguished six general activities for industrial enterprises: technical, commercial, financial, security, accounting and managerial. Scope and functions of financial management: The scope of financial management includes three groups. The functions of strategic management are distinct. The first and foremost function of financial management is that it initially estimates the finance needed for the smooth running and functioning of the business. Liquidity and working capital decisions, budgeting, financial planning and financial control are all key aspects that you need to take into account. Deciding Capital Structure 3. However, they’re not fixed. Proper Use of Surpluses. profit and wealth maximization.If we broadly classify the functions of a finance head of the business, it can be the procurement of funds and utilization of funds. Importance of Strategic Financial Management Helps in Detecting the requirements of capital in the business. Armed with agency theory , you will discover that the function of strategic financial management can be deconstructed into four major components based on the mathematical concept of expected net present value (ENPV) maximisation: The investment, dividend, financing and portfolio decision. Financial management is what financial manager do to achieve organizational goals and objectives. Risk Management : Sound financial management prepares the organization to forecast risks, put in place mitigation plans as well as to meet unforeseen risks and emergencies effectively. Five Functions of Management. Functions of Strategic Financial Management The key decisions falling within the scope of financial strategy include the following: 1. Financing decisions: These decisions deal with the mode of financing or mix of equity capital and debt capital. It means applying general management principles to financial resources of the enterprise. These functions include analysis, planning, operating, monitoring, assessing and adapting. The features are: 1. However, the increasing complexity of organizations created a need for professional management. Proper Cash Management 6. The functions of financial management are guided by the ultimate aim of any business i.e. Organisational Framework. This is one of the primary duty of financial managers. The external function encompasses the entire range of activities to do with paying the suppliers, vendors, and the other stakeholders who do business with the corporates.

Strategic Financial Management is the portfolio constituent of the corporate strategic plan that embraces the optimum investment and financing decisions required to attain the overall specified objectives. Henri Fayol gained world-wide fame for his 14 general principles of management. Nature of Financial Management 3. It focuses on the alignment of financial management with the corporate and business objectives of an organisation to gain strategic advantage.

While strategy is a long … Functions of Strategic Financial Management: Strategic Financial Management is the portfolio constituent of the corporate strategic plan that embraces the optimum investment and financing decisions required to attain the overall specified objectives. Functions 5.