Financial management

Financial Management

Financial management (/faɪˈnænʃəl ˈmænɪdʒmənt/) refers to the strategic planning, organizing, directing, and controlling of financial undertakings in an organization or an institute. It also includes applying management principles to the financial assets of an organization, while also playing a part in fiscal management.

Etymology

The term "financial management" is derived from the words "finance" and "management". "Finance" originates from the French word financer, which means to pay a ransom, and the Latin word finis, which means end or termination. "Management" comes from the Italian word maneggiare which means to handle, especially tools, and is derived from the Latin word manus, meaning hand.

Related Terms

• Financial Planning: The process of estimating the capital required and determining its competition. It is the process of framing financial policies in relation to procurement, investment and administration of funds of an enterprise.

• Capital Budgeting: The process of making investment decisions in capital expenditure. These are expenditures the benefits of which are expected to be received over a period of time exceeding one year.

• Working Capital Management: The management of the capital which an organization requires for its day-to-day operations. It is concerned with the management of the current assets, current liabilities and the inter-relationship that exists between them.

• Profit Planning: The process of determining the actions and the resources that would lead to a desired level of profit. It involves the preparation of a number of budgets, which, when integrated together, forms a coordinated business plan.

• Dividend Decision: The decision made by the financial manager or the board of directors regarding the amount of profits that will be distributed as dividends.

• Cash Management: The process of managing the cash flow and liquidity of a corporation and enhancing its operational efficiency and financial stability.

• Risk Management: The process of identifying, assessing, and controlling threats to an organization's capital and earnings.

See Also

• Financial Analysis
• Financial Accounting
• Corporate Finance
• Investment Management

External links

• Medical encyclopedia article on Financial management
• Wikipedia's article - Financial management

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