Questions and Answers
What is the primary concern of financial management?
Maximizing the value of the firm for stockholders
What is the role of financial managers (FM) in an organization?
Reporting directly to senior management and the financial director
What does short-term working capital management in financial management primarily focus on?
Maximizing current assets and minimizing current liabilities
How is financial management related to treasury management?
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What is the main focus of long term strategic financial management?
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Study Notes
Financial Management Overview
- The primary concern of financial management is to maximize the value of the organization by making the most efficient use of its resources.
Role of Financial Managers
- Financial managers (FM) play a crucial role in an organization, responsible for managing the financial activities, including planning, organizing, and controlling financial resources.
Short-Term Working Capital Management
- Short-term working capital management primarily focuses on managing the day-to-day financial activities, such as cash flow, inventory, and accounts receivable and payable.
Financial Management and Treasury Management
- Financial management is closely related to treasury management, as both involve managing the organization's funds, including investing, borrowing, and managing cash flow.
Long-Term Strategic Financial Management
- The main focus of long-term strategic financial management is to make decisions that impact the organization's future performance, including investments, capital structure, and strategic planning.
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