Financial Management is the process of planning, organizing, controlling, and monitoring financial resources to achieve business objectives. It ensures that a company remains profitable and financially stable.
1. Financial Accounting
- Focuses on recording, summarizing, and reporting financial transactions.
- Helps businesses prepare financial statements like the balance sheet and income statement.
- Ensures transparency and compliance with accounting standards.
- Provides financial data for internal decision-making.
- Helps in budgeting, cost analysis, and performance evaluation.
- Used by managers to improve operational efficiency and profitability.
- Deals with investment decisions, risk management, and capital structure.
- Involves financial planning, capital budgeting, and dividend policies.
- Aims to maximize shareholder value while managing financial risks.