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Financial management is one part of management science which until now continues to be developed from initially only raising funds, now it has covered all financial activities ranging from raising funds, using up to managing funds. And to find out the ins and outs, the following we will review more fully.
Understanding Financial Management
There are several opinions of experts related to the definition of financial management, which in essence is an activity carried out by the company related to its efforts to obtain funds and how to manage it to a minimum to achieve the goals planned by the related company.
In a company, financial management is really needed to increase the value of the company itself, when management in a good company can be sure that the company's selling price is high, and the stock price will remain stable which makes investors will be happy to disburse their funds. To ensure this, a financial manager who is competent and experienced in his field is needed.
Financial Management Function
Basically management activities related to corporate finance have two main functions, the first is the function of obtaining funds, where the company must make decisions regarding funding or choosing alternatives in finding sources of funds. In addition, how to obtain the easiest and cheapest funds can be reflected in the liability balance sheet.
The second function is the function of using funds. Where financial management must make decisions related to investment decisions or investment selection. It also plays a role in regulating active spending so that funds spent can be used efficiently. Finally is the planning and allocation of funds that have been collected in order to provide more profit for the company.
Of the two functions mentioned above, it is then elaborated into several financial management functions, which are functions for financial search, financial planning, financial budgeting, financial management, financial storage, financial system control within the company, financial audit to avoid deviations of funds, and finally function for financial reporting which is also used as company evaluation material.
Scope of Financial Management
Based on the explanation related to the company's management activities in the financial sector above, we will see that basically the scope of financial management in the company deals with three things. The first is how to obtain funds. Related to activities undertaken to obtain sources of funds or investors. Whether it comes from within the company or from marriages outside the company.
Next is how the use of funds, namely an activity carried out to use the source of funds that have been obtained in the form of investment in various forms of assets or assets related to the allocation of cash, fixed assets and for other assets adjusted for the amount of assets held.
And the scope of the latest financial management is how to manage the assets owned. Which is an activity to manage the source of funds that have been invested and allocated in various forms of assets or assets effectively and efficiently, to get the maximum profit with the lowest possible expenses.
From the description above it can be concluded that financial management is an activity carried out by the owner or company management that aims to obtain the cheapest possible source of funds and to subsequently be used and managed effectively and efficiently to produce maximum profits. Thus the information we can convey, hopefully can increase your knowledge ..
Description: Financial management has a very important function to facilitate the achievement of company goals, for this reason a competent financial manager is needed and understands the ins and outs of financial management.

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