- May 4, 2014
- Posted by: essay
- Category: Term paper writing
To achieve theÂ primary goalÂ it is necessary to meetÂ aÂ set ofÂ particular objectives.Â ObjectivesÂ of financial Management include:
– EnsuringÂ the formationÂ of the financial resourcesÂ needed to ensure theÂ planned activities;
– EnsuringÂ the most efficient useÂ of financial resources;
– Optimization ofÂ cash flow;
– OptimizationÂ of expenditure;
– Maximization ofÂ profits of the enterprise;
– Minimization ofÂ the level ofÂ financial risk;
– Constant financial balanceÂ of the enterprise.
– EnsuringÂ sustainable growthÂ of economic potential;
– AssessmentÂ of potentialÂ financial capacity ofÂ enterprisesÂ in the comingÂ periods;
-Â Ensure theÂ profitability ofÂ the target;
-Â To avoidÂ bankruptcy (crisis management);
– To ensureÂ ongoing financialÂ stability ofÂ the organization. (Brigham and Houston 2009)
Lets considerÂ how to implementÂ these objectivesÂ of financial management.
1.Â Ensure formationÂ of sufficientÂ financial resources in accordanceÂ with the objectivesÂ of the enterpriseÂ in the planned period. This task isÂ accomplished byÂ determining the totalÂ funding needsÂ for the coming period,Â maximum use ofÂ own financialÂ resources from domestic sources,Â determining the feasibilityÂ of formation of financial resourcesÂ from external sources, management ofÂ leveragedÂ funds,Â optimization of the structureÂ of financialÂ sources of theÂ resourceÂ potential.
2.Â Optimization of theÂ cash flow. This problem can be solvedÂ by efficientÂ management of the company’s cash flowÂ in the circuitÂ of itsÂ funds,Â ensuringÂ synchronization ofÂ the volume ofÂ receipts andÂ expenditure of fundsÂ forÂ specific periods, maintainingÂ the necessaryÂ liquidityÂ toÂ current assets.Â One of the results ofÂ this optimizationÂ is minimization of theÂ average balance ofÂ available cash assets, reducing theÂ lossesÂ from inefficiencies andÂ inflation.
3. EnsuringÂ the most effective useÂ of financial resourcesÂ generatedÂ in the context ofÂ the main activities ofÂ the enterprise. Optimization of distribution ofÂ the generatedÂ amount of financial resourcesÂ provides establishment ofÂ the necessaryÂ proportionalityÂ in their useÂ for the purposesÂ of industrial and socialÂ development of the company, payment ofÂ the required levelÂ of incomeÂ on investmentÂ businessÂ owners, etc.Â In the process ofÂ industrial consumptionÂ of financial resourcesÂ generatedÂ in the context ofÂ the main activities ofÂ the enterprise, it is necessary to take into accountÂ the strategic objectivesÂ of its developmentÂ and possibleÂ rate of returnÂ of the fundsÂ invested.