COMMERCE 1E03 Chapter 14: Chapter 14 – Financial Management.docx
11 Apr 2012
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Document Summary
Finance: the function in a business that acquires funds for the firm and manages those funds within the firm. Financial management: the job of managing a firm"s resources so it can meet its goals and objectives. Financial managers: managers who make recommendations to top executives regarding strategies for improving the financial strength of a firm. Financial managers must understand accounting and accountants must understand finance. A key responsibility if a financial manager"s tasks is to obtain money and then control the use of that money effectively. 3 most common ways for a firm to fail financially: undercapitalization (lacking funds to start and run the business, poor control over cash flow, inadequate expense control. Financial planning is a key responsibility of the financial manager in a business. It involves analyzing short-term and long-term money flows to and from the firm. The main objective is to optimize the firm"s profitability and make the best use of its money.
