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Lesson 1:
Overview of the Fundamentals, Scope, & Objectives of Financial Management;
The Role of the Financial Manager
(A Compilation)
Learning Objectives: After the chapter discussion, students are expected to be able to;
1. Define financial management.
2. Enumerate the scope and objectives of financial management.
3. Identify the major decision areas of financial management.
4. Explain the ten principles that form the basics of financial management.
5. Enumerate the competencies of an effective financial manager.
6. Enumerate the responsibilities of the financial manager.
7. Explain the ten principles that form the basics of financial management.
8. Enumerate and compare the legal forms of business organization.
Financial management
Other Definitions:
• The management of the finances of a business/ organization in order to achieve
financial objectives.
• Refers to the efficient and effective management of money (funds) in such a manner
as to accomplish the objectives of the organization
Strong financial management in the business arena requires managers to be able to:
1. Interpret financial reports including Income Statements, Balance Sheet, Cash Flow
Statements and others.
2. Improve the allocation of working capital within business operations.
3. Review and fine tune financial budgeting and revenue and cost forecasting.
4. Look at the funding options for business expansion, including both long and short-
term financing.
5. Review the financial health of the company or business unit using financial ratios.
6. Understand the various techniques use in project and asset valuation.
FM PR1 1st Semester 2019-2020 Business Administration Department
References:
1. Financial Management , 10th Edition by: Keown, et.al.
2. Business Finance, by: Mejorada, Nenita.
3. Fundamentals of Financial Management by: Anastacio, Flordeliza, et. Al, 2010 edition
4. www. Economywatch.com/finance/financial-management.html