What is Financial Management?
Let's understand this with an example. Assume you are going to start a business. When you start a business, you should have an idea.
- You should decide what are the assets you require.
- You should be in a position to estimate the total cost of the assets.
So, only if you have these two information, you will be able to start your business.
But this alone is not sufficient.
- You have to run your business on daily basis.
- Then you should know what is the cash required to run the business.
Now you have fair idea about the cash required to start and run a business. You should identify sources for funding business assets and also for running business.These sources can be
- Owners funds or it can be from outsiders.
Whether you raise the money from owners or outsiders, what you have to ensure is cost of these funds are as low as possible, only then the profits of the business can be maximized.
To know more, watch this video lecture.
Note: This lecture is part of my Online course
FINANCIAL MANAGEMENT A COMPLETE STUDY