23. Introduction to Financial Management
Financial Management encompasses the planning, organizing, directing, and controlling of financial activities within an organization. It is critical for maximizing profits, ensuring liquidity, and facilitating long-term growth, especially in engineering and IT sectors where financial literacy is essential. Key concepts include investment, financing, dividend decisions, and the role of financial managers in navigating challenges and opportunities.
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What we have learnt
- Financial Management is crucial for efficient resource allocation and maximizing shareholder value.
- The primary objectives include profit maximization, wealth maximization, ensuring liquidity, and efficient resource utilization.
- Key financial decisions covered include investment, financing, and dividend decisions, all of which impact a company's financial health.
Key Concepts
- -- Financial Management
- The process of managing the financial resources of an organization to achieve its business objectives.
- -- Profit Maximization
- The objective of ensuring that the business earns the highest possible profits in the short term.
- -- Wealth Maximization
- Increasing the overall value of the firm for shareholders through strategic long-term decisions.
- -- Risk Management
- Identifying and managing financial risks such as credit risk, market risk, and interest rate risk.
- -- Capital Budgeting
- The process of deciding where to invest funds for optimal returns.
Additional Learning Materials
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