Financial Management

Meaning of financial managenent
Financial management can be define as the process of acuiring and using funds to accomplish a financial objective. Simply put ,financial management has ti do with getting your hands on money and deciding how best to spend, save, or invest it.

Some important firm level financial management activities include identifying a business' strengths and weakness, evaluating investment opportunities, forecasting future needs and managing the implementation of the investment. All of these financial management activities require that the manager project the future position of the firm under different scenarios and determine the likelihood of accomplishing stated goals.


Financial management decisions regarding the acquisition of funds must consider whether to acquire funds through one's own financial resources, the financial resources of other investors or by borrowing. Possible outside sources of funding might include commercial banks, the Farm Credit System,Life Insurance Companies, individuals and others, stocks, or bonds.Decisions will also be made about whether to obtain long, short-term,or some combination of long and short tern funds.

Financial management decisions also focus on asset investment opportunities. There is an almost limitless set of investment opportunities available with a wide variety of different characteristics. Some investment will be of a short term nature, such as 'cash' or investor's, while others, such as real estate or production facilities, will provide long term returns. There are investments available that provide fairly certain, low risk returns, while others will provide uncertain,high risk returns.