Gujarat BoardEnglish MediumSTD 12 CommerceOCMFINANCIAL MANAGEMENT3 Marks
Question
Explain the concept of financial management through various definitions.
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Answer
Finance:
In layman language, management of finance is called financial management.
Finance is the blood of business.
Business can neither be started without finance nor can it sustain without it. Thus, finance is the foundation stone of business.
Financial management:
The activity done at managerial level for planning and controlling financial resources for the business enterprise is called financial management.
Under financial management, the managers try to optimally manage the financial resources so that the business earns a satisfactory return.
Various definitions of financial management:
According to F. W. Paish, “In the modern economy, based on utilization of funds, financial management means acquiring of required funds at the required time.”
According to Raymond J. Chambers, “Financial management means to take decisions about financial matters to implement then smoothly and to review, them.”
According to Prof. M. Kimbal, “Financial management means acquisition of fund, its optimum utilization and its appropriate allocation.”
From all these definitions we can conclude that the scope of financial management is so wide that it covers all the financial decisions of business, right from the inception.
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