Effective Financial Management: Traditional vs. Modern Approaches
Explore the scope of financial management, from traditional approaches like raising funds and external reporting to modern methods involving financial decision-making, investment strategies, and dividend policy decisions. Discover how financial management enhances resource utilization within organizations and extends beyond finance boundaries.
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Presentation Transcript
SCOPE OF FINANCIAL MANAGEMENT
MEANING; FINANCIAL MANAGEMENT IS CONCERNED WITH THE EFFECTIVE USE OF CAPITAL FUNDS OF THE ORGANISATION.
Scope of Financial Management; A. Traditional approach B. Modern approach A. Scope under Traditional approach Raising funds External reporting Institutions and instruments
B. Scope under Modern approach 1. Financial decision Estimation of fund requirement Procurement of fund Planning the capital structure Negotiating with funding agencies 2. Investment decision Cash management Working capital management Capital budgeting Portfilio management Risk management Evaluation of performance thro bench marking
3. Dividend policy decision Profit allocation Framing dividend policy Financial Management monitors and discovers the opportunities to make the best of all the resources used with a organisation and to do this, Financial management becomes seamless and goes beyond the confines of finance.
