Financial management focuses on ratios, equity and debt. Financial managers are the people It is an advanced goal compared to profit maximization. Survival. Goals / Objectives of Financial ManagementA goal of the firm is the target against which a firmĀ¶s operating performance is measured. The goals se. Valuation, a goal of financial management, often relies on fundamental analysis of There are several goals of financial management, one of which is valuation.


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Generallyfirm or corporation are the purposes for which the finance functions are carried out.


They provide criteria for financial decision-making and are essential for right financial decisionFinancial manager takes goals of a financial management goals as guidelines for financial decisions.

Hence, goals of firms are also called as goal of the financial management or financial goal.

The goals in financial management goals second group, involving bankruptcy avoidance, stability, and safety, relate in some way to controlling risk. Unfortunately, these two types of goals are somewhat contradictory.

Financial Management: Goals, Nature, Scope and Functions

The pursuit of profit normally involves financial management goals element of risk, so it isn't really possible to maximize both safety and profit. What we need, therefore, is a goal that encompasses both factors.


Given this, instead of listing possible goals for the financial manager, we really need to answer financial management goals more fundamental question: From the stockholders' point of view, what is a good financial management decision?

If we assume that stockholders buy stock because they seek to gain financially, then the answer is obvious: Good decisions increase the value of the stock, and poor decisions decrease the value of the stock. Financial management goals our observations, it follows that the financial manager acts in the financial management goals best interests by making decisions that increase the value of the stock.

The appropriate goal for the financial manager can thus be stated quite easily: The goal of financial management is to maximize the current value per share of the existing stock. The goal of maximizing the value of the stock avoids the problems associated with the different goals we listed earlier.

A strong and stable organization will obviously enlist the support of investors as well as creditors that will enable the firm to procure funds from external sources at reasonable rate conveniently.

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  • Introduction to the Field and Goals of Financial Management

With past accumulated funds the management can relieve the company of the rigours of debt burden. Thus, ploughing back offers the best means of the organizational future financial management goals.

The stockholders can take advantage of the price rise by disposing of entirely or a part of the shares in the stock market.

Organisational Framework for Financial Management: Functions of financial management, as stated financial management goals, are, by and large, the same in almost all types of business concerns. However, organisation of these functions is not standardized one. It varies financial management goals enterprise to enterprise depending essentially on the characteristics of the firm, size, nature, convention, etc.

Thus, in smaller companies where operations are relatively simple and less complicated and little delegation of management functions exists, no separate executive is appointed to handle finance functions.


In fact, it is the proprietor who handles all these activities himself. He prepares cash budget for his firm to assess the requirements and arranges finance to meet these requirements. He himself looks after receipts and disbursement work, extends credit, collects accounts receivable, financial management goals cash accounts and arranges additional funds.

In such concerns, finance function is not properly defined and finance function is combined financial management goals production and marketing functions.

Primary Goals of Financial Management |

Financial planning is hardly given important place. Proprietors have seldom any training in such activities. With growth in the size financial management goals the organisation degree of specialisation of finance function increases.

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