What Are The Areas Of Financial Management?

What are the 4 areas of finance?

Question: Discuss the four basic areas of finance.

Which area is closely related to your current work.

Corporate finance, Investments, Financial institutions, International finance..

What is the basic of finance?

Finance is a broad term that describes activities associated with banking, leverage or debt, credit, capital markets, money, and investments. Basically, finance represents money management and the process of acquiring needed funds.

What is finance and its types?

Finance is defined as the management of money and includes activities such as investing, borrowing, lending, budgeting, saving, and forecasting. There are three main types of finance: (1) personal.

What are the three primary categories of financial decision making?

The three types of financial management decisions are capital budgeting, capital structure, and working capital.

What are the key areas of financial management?

Functional Areas of Financial ManagementDetermining Financial Needs: A finance manager is supposed to meet financial needs of the enterprise. … Selecting the Sources of Funds: … Financial Analysis and Interpretation: … Cost-Volume-Profit Analysis: … Capital Budgeting: … Working Capital Management: … Profit Planning and Control: … Dividend Policy:

What are the 6 principles of finance?

There are six basic principles of finance, these are:Principles of risk and return.Time value of money.Cash flow principle.Profitability and liquidity.Principles of diversity.Hedging principle.

What are the 5 components of a financial plan?

Essential Components to a Financial PlanGoals & Objectives: Goals and objectives should be listed by priority and should be as specific as possible. … Income Tax Planning: … Balance Sheet: … Issues & Problems: … Risk Management and Insurance: … Retirement, Education, and Special Needs: … Cash Flow Statement: … Investment Planning:More items…

What are the 7 key components of financial planning?

The 7 Elements of a Financial PlanRetirement plans.Investment management.Social Security Planning.Risk Management.Tax Planning.Estate Planning.Cash flow and budgeting.

Why should I study finance?

Studying finance can prepare you not only for careers in the financial services sector, but also for tasks in your everyday life. … And because finance revolves around planning and analysis, studying finance and becoming more financially literate enables people to make better personal financial decisions.

What is financing decision?

Financial decision is a process which is responsible for all the decisions related with liabilities and stockholder’s equity of the company as well as the issuance of bonds. … Establish your financial goals: Setting the goals you want to achieve and the risk that you would be able to suffer.

Why is decision making in financial management so important?

The main aspects of the financial decision-making process relate to investments, financing dividends and asset management. … If they don’t, it is necessary to define the types of assets that the company must acquire, or otherwise sell or get rid of, in order to achieve efficient management.

What are the 3 major areas of financial management?

Finance consists of three interrelated areas: (1) money and credit markets, which deals with the securities markets and financial institutions; (2) investments, which focuses on the decisions made by both individuals and institutional investors; and (3) financial management, which involves decisions made within the …

What are the four 4 areas of financial management decision making?

There are four main financial decisions- Capital Budgeting or Long term Investment decision (Application of funds), Capital Structure or Financing decision (Procurement of funds), Dividend decision (Distribution of funds) and Working Capital Management Decision in order to accomplish goal of the firm viz., to maximize …

What are the 5 principles of finance?

There are five overall principles to managing the financial transactions of sponsored research funds. Policies and procedures within Research Accounting Services have been developed in support of these principles. The five principles are consistency, timeliness, justification, documentation, and certification.

What are the major areas of decision making?

The three major areas of decision making can be divided decision, financial decision and investment decision. Investment decision relates that where should the funds and in what proportion should they be implied.

What is the main objective of financial management?

Profit maximization happens when marginal cost is equal to marginal revenue. This is the main objective of Financial Management. Maintaining proper cash flow is a short run objective of financial management.

What are the 3 rules of money?

The three Golden Rules of money managementGolden Rule #1: Don’t spend more than you make.Golden Rule #2: Always plan for the future.Golden Rule #3: Help your money grow.Your banker is one of your best sources of money management advice.