Introduction to Financial Management:

Financial Management is that managerial activity which is concerned with the planning & controlling of firms financial recovers.

Firms creating manufacturing capacities for production of goods and services to their customers and sell it to earn Profit. Funds are acquiring manufacturing and other facilities. The three most important activities of a business firm are:

A firm secure whatever capital it needs and employs it in activities (Finance activity) which generate returns a invested capital. (Production & marketing Service)

The function of raising fund interesting them in asset and distributing returns earned from asset to share holders are respectively known as financing investment and dividend decisions.

Real Assets:

1. Tangible Assets:

Plant & Machinery

Building

Furniture

2. Intangible Assets:

Patents & copy Rights.

Good will

3. Financial Assets:

Shares

Debentures

Lease obligation

Borrowings

Finance may be defined as the Art and Science of managing money. The major areas of financing are

(i)  Financial Services:

It is concerned with the designed and delivery of advice and financial products to the individuals, business and Govt. with the areas of banking and related institutions, personals financial planning, investments, real estate, insurance and so on.

(ii)  Financial Management:

It is concerned with the duties of financial managers in the business firm. Financial managers actively manage the financial affairs of any type of business. Namely financial and non-financial, private & public, large & small, Profit Seeking & not for profit. They perform varied tasks as budgeting, financial forecasting, cash management, credit administration, investment analysis and so on.