Managerial finance


Managerial finance is the branch of finance that concerns itself with the managerial application of finance techniques.
Sound financial management creates value and organizational agility through the allocation of scarce resources amongst competing business opportunities.
It is thus an aid to the implementation and monitoring of business strategies and helps achieve business objectives.
Managerial finance is interdisciplinary, borrowing from both managerial accounting and corporate finance.
See Financial analyst #Corporate and other.

Approach

The difference between a managerial and a technical approach can be seen in the questions one might ask of annual reports.
The concern of a technical approach is primarily measurement. It asks: is the accounting correct, in that money is assigned to the right categories, and were accounting principles followed?
The purpose of a managerial approach, however, is to understand what the figures mean.
To interpret financial results in the manner described above, managers use Financial analysis techniques.
Managers also need to look at how resources are allocated within an organization. They need to know what each activity costs and why. These questions require managerial accounting techniques such as activity based costing.
Managers also need to anticipate future expenses. To get a better understanding of the accuracy of the budgeting process, they may use variable budgeting.

Role of corporate finance

Managerial finance is also interested in determining the best way to use money to improve future opportunities to earn money and minimize the impact of financial shocks. To accomplish these goals managerial finance uses techniques borrowed from Corporate finance to address the following: