Financial management is a system of purposeful actions on the management of the formation, use and distribution of financial resources of the enterprise and optimization of their circulation.
of purposeful actions on the management of the formation,
use and distribution of financial resources of the enterprise and optimization of their circulation.
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The system of financial management includes:
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Financial activity occupies an important place in the
management of the enterprise, and it depends on the
completeness of the financial support of the current production and economic activity and development of the enterprise; therefore, the main purpose of financial management is to: find a reasonable compromise between the objectives set by the enterprise and the financial capabilities of the implementation of these tasks .
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Financial management is based on three main concepts:
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Necessary conditions for the effective functioning of financial
management are:
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Financial management is based on the following principles:
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The main purpose of financial management is to
maximize the welfare (wealth) of the owners of the
capital of the enterprise, which finds concrete implementation in increasing the market value of the enterprise (or its shares), that is, obtaining the maximum benefit from the operation of the enterprise in the interests of its owners.
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The main purpose of financial management is specified
in the system of goals, which differ in degree
of formalization, priority and capabilities of quantitative assessment, namely:
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In the process of achieving the main goal,
the following tasks of financial management are addressed: Ensuring high
financial stability of the company in the process of its development - is through the implementation of an effective policy of financing the economic activity of the enterprise. Ensuring the realization of the economic interests of the subjects of financial relations - is carried out through the effective management of the assets of the enterprise, optimization of their composition. Ensuring minimization of financial risks - is realized through effective management of financial risks, which provides an assessment of certain types of financial risks. Optimization of monetary turnover and maintenance of constant solvency of the enterprise - is achieved at the expense of effective management of cash flows of the enterprise, maintenance of liquidity of its assets, providing of constant solvency of the enterprise.