Question

DISCUSS THE VITALITY OF FINANCIAL MANAGEMENT

Answer 1

Financial management is the corner stone and life breath of any business. Running a business needs unexpected expenses, proper supply of capital and prediction of a big picture is not possible without an efficient financial management system.It also tells business's financial position and its ability to tackle threats and utilize opportunity. Some of points which identifies vitality of the financial management for business at its different stages:-

At early stage of business-Financial management starts from the very begining of the Business. It starts before formal launching.All the important decisions like source of business capital,planning for the amount of revenue generation for keeping business functional and other financial stratizing constitute financial management

Running business- When business starts running, to ensure that whether it is running as per entrepreneur has emvisioned it to, financial management plays vital role. It keeps check over actual results and expected results to prevent the business from drowning into numbers.

Long term planning- Every business goes in a phase where it witnesses stagnant sales or sluggish growth.At that time only efficient financial management strategy keep the business focused to beat the end game.It also helps to overcome these contingencies in future.

Investment decisions-It assists business to draw essential investments.Investors don't take interest in a business where there is no proper planning of returns to investors.