Financial Management

Finance is the science of funds management

Finance is the science of funds management. The general areas of finance are Business Finance , personal finance, and public finance. Finance includes saving money and often includes lending money. The field of finance deals with the concepts of time, money, and risk and how they are interrelated. It also deals with how money is spent and budgeted.

Broadly speaking, the process of financial management takes place at two levels. At the individual level, financial management involves tailoring expenses according to the financial resources of an individual. Individuals with surplus cash or access to funding invest their money to make up for the impact of taxation and inflation. Else, they spend it on discretionary items. They need to be able to take the financial decisions that are intended to benefit them in the long run and help them achieve their financial goals.

Financial management in the small firm is characterized, in many different cases, by the need to confront a somewhat different set of problems and opportunities than those confronted by a large corporation. One immediate and obvious difference is that a majority of smaller firms do not normally have the opportunity to publicly sell issues of stocks or bonds in order to raise funds. The owner-manager of a smaller firm must rely primarily on trade credit, business loan , lease financing, and personal equity to finance the business.

Some other good sources of funding are Industrial banks, home equity loans and loans on credit cards. Some other not so obvious ways of raising capital can be equipment leasing and advertising. Another area, which you can explore, is personal grants from corporates.

So arm yourself with a solid business plan, determination and the right kind of information on what investors are looking for. You will hit the ground running with some of these ideas above.

Financial Management

By: Michael Chopra

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