Financial Management and Procurement

Questions and Answers

Financial Management is concerned with procurement of finance only.

False

The main aim of Financial Management is to maximize profits.

False

Financial Management decisions affect only a few items in a company's financial statements.

False

The quality of Financial Management has no impact on a company's financial health.

False Signup and view all the answers

Financial Management aims to ensure the unavailability of funds whenever required.

False Signup and view all the answers

Match the objectives of Financial Management with their descriptions:

Optimal procurement = Identify and compare sources of finance based on cost and risk Effective deployment of funds = Invest to achieve returns exceeding procurement cost Risk control = Minimize risks associated with procured finance Financial availability = Ensure funds are available whenever required Signup and view all the answers

Match the aspects of finance with their management goals:

Cost of funds = Reduce it Risk = Keep it under control idle finance = Avoid it Financial returns = Maximize it Signup and view all the answers

Match the consequences of good Financial Management with their impact on a business:

Direct impact on financial health = Reflects in financial statements Business survival = Depends greatly on it Financial statements = Almost all items are affected by it Risk minimization = Achieved through it Signup and view all the answers

Match the financial management decisions with their effects:

Procurement decisions = Affect financial statements directly or indirectly Investment decisions = Impact financial returns Risk management decisions = Control associated risks Funding decisions = Influence financial availability Signup and view all the answers

Match the importance of Financial Management with its implications:

Quality of Financial Management = Directly affects business financial health Financial health = Reflected in financial statements Business success = Dependent on good Financial Management Financial statements = Almost all items are affected by Financial Management decisions Signup and view all the answers

Study Notes

Importance of Financial Management

Financial management is crucial for the success of a business as it determines the financial health of the organization.
The quality of financial management has a direct impact on the future of a business.

Objectives of Financial Management

Optimal procurement of finance from available sources
Minimizing the cost of funds procured
Controlling risk associated with fund procurement
Achieving effective deployment of funds
Ensuring availability of funds when required
Avoiding idle finance

Role of Financial Management in Business

Financial management decisions directly or indirectly affect almost all items in financial statements, such as Balance Sheet and Profit and Loss Account.
It reflects a firm's financial position and health through financial statements.
Financial management helps in identifying and comparing different sources of finance based on their costs and associated risks.
It aims to invest funds in a way that returns exceed the cost of procurement.

Significance of Financial Management

Financial management is essential for ensuring the financial health of a business.
It plays a vital role in the success and future of an organization.

Importance of Financial Management

Financial management is crucial for the success of a business as it determines the financial health of the organization.
The quality of financial management has a direct impact on the future of a business.

Objectives of Financial Management

Optimal procurement of finance from available sources
Minimizing the cost of funds procured
Controlling risk associated with fund procurement
Achieving effective deployment of funds
Ensuring availability of funds when required
Avoiding idle finance

Role of Financial Management in Business

Financial management decisions directly or indirectly affect almost all items in financial statements, such as Balance Sheet and Profit and Loss Account.
It reflects a firm's financial position and health through financial statements.
Financial management helps in identifying and comparing different sources of finance based on their costs and associated risks.
It aims to invest funds in a way that returns exceed the cost of procurement.