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Financial Management Training

Financial Management Training

Financial Management Training will build up the capacity of organisations

 

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Interested in financial management training? Then get in touch with us, we can help with any form of financial management training.

 

Objectives of Financial Management

Financial management is concerned with sourcing, spending and control of financial resources including cash control and investments.

  1. To ensure regular and adequate supply of funds to the organisation.
  2. To ensure adequate returns on investments to the shareholders.
  3. To ensure optimum funds utilisation. Once the funds are sourced, they should be utilised in maximum possible way providing value for money and good ROI investments.
  4. To ensure investments are risk managed, i.e, funds should be invested in risk managed ventures so that adequate rate of return can be achieved to the risk appetite
  5. To plan an optimal capital structure-There should be an optimal and fair composition of capital so that a balance is maintained between debt and equity capital.

Functions of Financial Management

  1. Estimation of capital requirements: A finance manager has to make estimation with regards to capital requirements of the company. This will depend upon expected costs and profits and future investment projects and policies of a business. Forecasts have to be made in a manner which increases earning capacity of enterprise.
  2. Determination of capital composition: Once the forecast have been made, the capital structure have to be decided. This involves short- term and long- term debt equity analysis. This will depend upon the proportion of equity capital a company is possessing and additional funds which have to be raised from outside parties.
  3. Choice of sources of funds: For additional funds to be procured, a company has many choices like-
    1. Issue of shares and debentures
    2. Loans to be taken from banks and financial institutions
    3. Public deposits to be drawn like in form of bonds.

    Choice of factor will depend on relative merits and demerits of each source and period of financing.

  4. Investment of funds: The finance manager has to decide to allocate funds into profitable projects so that there are risk managed investment and regular returns is possible.
  5. Disposal of surplus: The distribution of net profits can be done in two ways:
    1. Dividend declaration – It includes identifying the rate of dividends and other benefits like bonus.
    2. Retained profits – The volume has to be decided which will depend upon investment, diversification plans of the organisation.
  6. Management of cash: The Finance manager has to make decisions with regards to cash control and management. Cash is required for many purposes like payment of wages and salaries, payment of electricity and water bills, payment to creditors, meeting current liabilities, maintenance of enough stock, purchase of raw materials, etc.
  7. Financial controls: The finance manager has not only to plan, source and utilise the funds, but he also has to exercise control over the finances. This can be done through many techniques like ratio analysis, financial forecasting, cost and profit control, etc.

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