Financial Management and Procurement
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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.

<p>False</p> Signup and view all the answers

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

<p>False</p> Signup and view all the answers

Match the objectives of Financial Management with their descriptions:

<p>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</p> Signup and view all the answers

Match the aspects of finance with their management goals:

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

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

<p>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</p> Signup and view all the answers

Match the financial management decisions with their effects:

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

Match the importance of Financial Management with its implications:

<p>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</p> 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.

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.

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Description

This quiz tests your understanding of financial management, including the optimal procurement of finance and its utilization to maximize returns.

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