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Financial Management — Business Studies STD 12 Commerce — Question

CBSE BoardEnglish MediumSTD 12 CommerceBusiness StudiesFinancial Management4 Marks
Question
Explain the concept and the objective of Financial Management.
✓

Answer

Financial Management is concerned with the efficient acquisition and allocation of funds. In other words, financial management is concerned with management of flow of funds and involves decisions relating to procurement of funds, investment of funds and distribution of earnings.Objective of Financial Management:
The main objective of the financial management is to maximize the share holders wealth i.e. to maximize the market price of equity share of the company. This is because a company’s funds belong to the shareholders and the manner in which these are invested and the return earned on them determines the market price of shares. fulfills many other objective.

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