Financial management


Financial management may be defined as the area or function in an organization which is concerned with profitability, expenses, cash and credit, so that the "organization may have the means to carry out its objective as satisfactorily as possible;"
the latter often defined as maximizing the value of the firm for stockholders.
Financial managers are specialized professionals directly reporting to senior management, often the financial director ; the function is seen as 'Staff', and not 'Line'.

Role

Financial management is generally concerned with short term working capital management, focusing on current assets and current liabilities, and managing fluctuations in foreign currency and product cycles, often through hedging.
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The function also entails the efficient and effective day-to-day management of funds, and thus overlaps treasury management.
It is also involved with long term strategic financial management, focused on i.a. capital structure management, including capital raising, capital budgeting, and dividend policy;
these latter, in large corporates, being more the domain of "corporate finance."
Specific tasks:
Two areas of finance directly overlap financial management:
Managerial finance, is the branch of finance concerned with the managerial significance of financial techniques;
Corporate finance, is mainly concerned with the longer term capital budgeting, and typically is more relevant to large corporations.
Investment management, is the professional asset management of various securities, not usually in the company context.
The term "financial management" refers to a company's financial strategy, while personal finance or financial life management refers to an individual's management strategy. A financial planner, or personal financial planner, is a professional who prepares financial plans here.