Task of Financial Management

Objectives and Goals of Finance management

Finance deals with the planning and controlling of firms financial resources. The most fundamental objective of financial management is wealth maximization and profit maximization. However below are

The following main objective of financial management.

1. Proper Utilization of funds
The main responsibility of a financial manager is to ensure that the funds of the organization are utilized properly. The fund mobilizes through various sources and is channelized in proper direction leading to the best value addition.

2. Maximization on return of Investment.
It is one of the primary objectives of every firm to generate a higher return on investment so that they did not depend upon external borrowing and given higher returns to shareholders.

3. Maximizing earnings
Financial management aims to maximize earnings by maximizing its sales. Increasing earning influences ROI.

4. Maximizing Corporate Wealth
Another objective of financial management of a firm is to maximize corporate wealth. The wealth of a firm is to maximize corporate wealth. The wealth of a firm is to maximize corporate wealth. The wealth of the firm is to be maximized to enhance the overall value of a firm.

5. Maximizing Shareholder’s value
One of the primary objective of FM is to enhance shareholders value/money . This can be achieved through timely and reasonable dividends and efficient use of shareholders equity so as to increase the return on equity capital and provide benefits to the shareholders.



6. Social Acceptability and recognition.
Profit is the main motive of any business undertaking but however a business organization should not neglect its social obligation. A business organization undertaking its socio economic functions has to co- ordinate its business activities with social wants. Fulfillment of social obligation will help a firm earn a separate, image, goodwill and reputation in the society.

7. Adequate Cash flow.
Another short term or needed objective of FM is to ensure availability of adequate cash flow to meet its working expenses. Such as payments to creditors, laborers, rent,etc. An organization with a good cash flow can take advantage of many opportunities. Such as awaiting cash discounts on purchase of bulk buying etc.