The achievement of your business depends on your skill to reduce wastage and pilferage of funds in your financial operations and strategic activities. One goal of the financial management is to make sure you have sufficient funds at your disposal to bear your business operations and strategies. Financial management helps the preparation of cash flow forecasts and budgets. This facilitates you to apportion your financial resources successfully and increase additional capital in good time whenever you like you experience funding
Financial Literacy Meaning Financial literacy is the ability to understand how money works in the world: how someone manages to earn or make it, how that person manages it, how he/she invests it (turn it into more) and how that person donates it to help others. More specifically, it refers to the set of skills and knowledge that allows an individual to make informed and effective decisions with all of their financial resources. Financial Knowledge Financial knowledge component measures understanding of interest calculations, relationship between inflation and return, inflation and prices, risk and return, and the role of diversification in risk reduction. Importance 1. Well-functioning financial markets depend on participants making informed
Going Concern is one of fundamentals to prepare financial statement so company has to keep that assumption valid to successfully operate the business and to keep shareholder’s confidence alive. Dual Aspect Concept It states that every transaction have two concepts Dr & Cr. Increase in an assets results in the reduction of cash whereas increase in liability result in the increase in
The financial manager must decide how to use the money of the company. The financial manager also must ensure that the business has enough cash to pay their upcoming liabilities and preparing the financial statements to the higher management. It is the responsibility of a financial manager to decide the ratio between debt and equity. It is important to maintain a good balance between equity and debt. Words: (287) 2.
1.2 Goals and objectives of users of financial statements The main objective of financial reporting is to provide useful information to investors, creditors, and other interested parties. Financial reporting provides useful information about the firm's economic resources, claims against those resources, owners' equity, and changes in resources and claims. Perfectly, financial reporting provides company shareholders and other stakeholders like employees, communities, customers, and suppliers with information that aids in the prediction of the amounts, timing, and uncertainty of future cash flows. The main criteria for valid financial statements are that it should provide true and fair information that reflects the real condition and position of the firm, so that profits and revenue are not overstated and losses and expenses are not understated. Such kind of a fair statement would recognize the enterprise's financial strengths and weaknesses and review its liquidity and solvency.
Having proper knowledge of financial management will help a person to make its decisions wisely, thus each and every person will be able to save money and achieve their goals. For example, if a person has knowledge on financial education then that person can make a plan to achieve its goals, control and monitor its daily expenses and then finally can organize its money to achieve the desired result such as buying a car or house. This can lead to the improvement in the standard of living of a particular person. Along with that, when people get income it is either saved or consumed .As people make wise decisions and save money in their bank accounts, the money which is placed are mostly given out as loans to the firms for investment and when investment increases output also needs to increase, thus a lot of people are required to produce the output resulting in increase in employment. People who were unemployed before are now earning a source of living which will increase their standard of living.
Financial security is a most desired kind of security in life ,right from the very first moment a person begins to know what money is and he/she begins to take financial responsibilities, the person begins to desire a financial security in life. Financial security doesn't just come by wishing ,or because am working or I have a good job sometimes doesn't guarantee financial security.There are lots of factors that must be considered and things to put in place that will give you financial security.Continue reading to find out what will guarantee your financial security in life. What is financial security? Financial security can be best defined as the kind of peace you have when you don't have to worry about how much money that comes into your
The bond conceptual findings of their study provide sound knowledge and guidance for the further study in the field of management of working capital of any enterprise and naturally to this study as well. They explain, in the beginning, the importance of working capital, concept of working capital, financing of working capital, the use of short term versus long-term debt, relationship of current assets to fixed assets. In the next chapter they have dealt with the various components of working capitals and their effective management techniques. The components of working capital they have dealt with the cash, marketable securities, receivable and inventory for the efficient management of cash, they have explained the different cash management models. They have also explained the major sources and forms of short term financing, such as trade credit, loans from commercial banks and commercial
The main aim of financial inclusion is to make available banking service by providing access to financial market, credit market and gain knowledge of financial matters. Thus it aims is to provide banking and financial services to all people in a fair, transparent and equitable manner at affordable cost. Reserve bank of India and government plays a key role in promoting financial inclusion for economic development in the country by deepening the penetration of banking, making the banks nationalized, by RRBs establishment, introducing the approach of one person one account and also by launching the self help groups (SHG). Simplifying the KYC norms, interest
It is the duty of the finance manager to provide adequate cash to all segments of the organization. He also has to ensure that no funds are blocked in idle cash since this will involve cost in terms of interest to the business. A sound cash management scheme, therefore, maintains the balance between the twin objectives of liquidity and cost. Meaning of cash The term “cash” with reference to cash management is used in two senses. In a narrower sense it includes coins, currency notes, cheques, bank drafts held by a firm with it and the demand deposits held by it in banks.