Research Paper on "Contemporary Financial Management"
Research Paper 5 pages (1492 words) Sources: 4
[EXCERPT] . . . .
Financial ManagementRoles and objectives of financial management
Financial management refers to the organizing, planning, controlling and directing of finance for proper utilization of a company's funds. It also refers to the general management principles applied to the financial resources of a company Paramasivan C., 2009.
Financial management will play a critical role in the contribution towards the company's goals achievement of reducing costs and improving the financial position.
The objectives of financial management are to ensure there is adequate and regular funds supply for the enterprise. This means the company's finances must be well budgeted to ensure that proper planning is done and funds are availed when needed. The next objective is maximizing profits. Financial management has to ensure there is an adequate return on the shareholders investment. The finance manager will try to earn the maximum profits they can for the company in both short and long terms. Wealth maximization is another objective of financial management. This means earning maximum wealth for shareholders. The CFO will give the maximum dividend depending on the profits the company earns to the shareholders. They will also try and increase the shares market value. The company performance will determine the market value of the company's shares. Therefore, to get maximum wealth for shareholders, the company will need to have some good overall performance.
Another objective is proper estimation for the company's total financial requirements. This is a vital objective in financial management because the CFO will need to have proper e
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Proper mobilization of funds is another objective. Once the CFO has estimated to company's financial requirements, they are required to ensure the funds are utilized as expected. This would allow a company to keep track of its funds and account for their uses. Using the funds as expected will allow the company to maximize on its profits and reduce its costs, which would in turn maximize on the shareholders wealth.
Significance of evaluating financial performance, financial planning, and forecasting
Financial performance is a measure of how a company uses its assets to generate revenue in its primary business mode Bertoneche & Knight, 2001.
The term can also be used to describe a company's financial health. The importance of evaluating a company's financial performance is to determine is a company is able to use its assets well in order to generate income. Financial performance evaluation will also assist managers in identifying the company's weaknesses and strengths in regards to percentages and dollars. This evaluation will provide great insights as to whether the company has enough cash to enable it meet its obligations, is the company generating sufficient sales volumes, is the company able to make timely payments to its suppliers, and is there enough working capital for the company.
The most objective way of evaluating financial performance is through financial statement analysis. This will involve assessment of the company's profitability, leverage, solvency, and operational efficiency. The principle tool used to conduct this evaluation is financial ratio, and the main challenge is identifying which ratios to use, and the results are interpreted.
Financial planning focuses on the future of the company. It involves employing certain techniques, which will assist in determining how to plan a company's financial goals. Financial planning allows a company to forecast how it will spend the financial resources it has, and how the company will manage to make profits out of the decisions it has made. Therefore, financial planning is important as it enables the company to look into its future and build the type of security it would like. This planning will allow a company to anticipate and handle any obstacles that might arise in the process of attaining its financial goals.
For a company to proper plan it finances, it will need to analyze its net worth. This will allow a company to determine it has a negative or positive worth. The company's expense budgets will need to be analyzed too to determine how the company is spending money. The company's financial plans and goals… READ MORE
Quoted Instructions for "Contemporary Financial Management" Assignment:
“Write a 1,250-1,500-word paper analyzing concepts of contemporary financial management within the context of today*****'s economic conditions and the increased occurrences of corporate restructuring.
Use matrices attached as a guide.
Research financial management and corporate restructuring. Use a minimum of four credible articles to support the analysis. When researching, focus on articles which discuss real-world cases that exemplify the essence of each required component below and how they can or may have contributed to a corporate restructuring.
The analysis should include a discussion of the following:
1. The roles and objectives of financial management.
2. The significance of evaluating financial performance, financial planning, and forecasting, and examples of how each can be carried out.
3. Current conditions of fixed income and common stock securities and how these conditions impact financial management.
4. Risk and return and its role in financial management.
Prepare essay in APA format.
Include 4 in-text citations
An abstract is not required.
*****
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How to Reference "Contemporary Financial Management" Research Paper in a Bibliography
“Contemporary Financial Management.” A1-TermPaper.com, 2012, https://www.a1-termpaper.com/topics/essay/financial-management-roles-objectives/9236289. Accessed 3 Jul 2024.
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