Question

Is financial management important for public service organizations? If so, why? why not? explain using 150 words

Answer 1

Yes, financial management is important for public service organizations. Financial management is a tool that is used by managers to make financial decisions and analyze the financial impact of these decisions. These financial decisions are related to investment in any project, replacement of the equipment, or dividend policy of the company. Thus, it is equally important for both private and public service organizations. The scope of financial management is not only limited to making these decisions, but it also includes managing the financial resources available with the company. Its scope varies from raising the capital, managing the cost of raising the capital, ensuring the availability of an adequate amount of capital with the firm, etc. Thus, financial management includes planning the finances, raising and organizing the capital, and utilizing it to maximize the shareholder’s wealth. Thus, it helps managers to make better-informed decisions whether it is a public or private service organization.