financial managment Essay

Submitted By nanjum786
Words: 917
Pages: 4




"Financial management is concerned with raising financial resources and their effective utilization towards achieving the organizational goals."
Dr. S.N Maheshwari

"Financial management is the process of putting the available funds to the best advantage from the long term point of view of business objectives."
Richard A. Brealey

1.1: 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 require by the company.
Acquisition: it collect 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 profit as reserves.
Assessment: It also controls all the financial activities of the company. financial management is the most impartment functional area of management. All other functional areas such as production management, marketing management, personal management , etc depends on financial management. efficient financial management is required for survival, growth and success of the company or firm.

The planning, directing, monitoring, organizing, and controlling of the monetary resources of an organization. the financial management means :
1. to collect finance for the company at a low cost and
2. 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 objective of the company.
One of the major pre-requisite to become a successful manager is to have a clear understanding of the principles and practices of modern finance.

For the purpose of understanding financial management in a better way we are going to study the financial polices and methods of StarbucksInc.


Financial Data:
“A full fiscal year data on a company’s performance in terms of profits, revenues, operating income, etc. When accompanied by discussion of significant events that have affected performance.”
(RDS Business & Industry)

The process of analyzing a company's financial data (such as the balance sheet or profit and loss statement), thereby gaining an understanding of the financial health of the company and enabling more effective decision making. Financial statements record financial data; however, this information must be evaluated through financial statement analysis to become more useful to investors, shareholders, managers and other interested parties.

Financial analysis is an evaluative method of determining the past, current and projected performance of a company. Several techniques are commonly used as part of financial analysis.
There are two ways of analyzing financial data;

1. Internal Analysis

2. External Analysis


Internal Analysis External Analysis

Financial Statement Investment and Brokerage Companies
Income statement Balance Sheet Industry Trade Associations Cash flow Analysis Credit Collecting Organization Internal Audit