Financial Management: Meaning

Financial Management includes all the financial activities that take place in a business. According to Wester and Brigam, “Financial Management is an area of financial decision making harmonising individual motives and enterprise goals.”

Joseph and Massie have defined Financial Management as “the operational activity of a business that is responsible for obtaining and effectively, utilising the funds necessary for efficient operations”.

It is very clear from the above definitions that Financial Management includes Financial Planning, Financial Control and Financial Administration. Financial Management means efficient utilization of funds available. Funds must be used efficiently and should not be kept idle. If the funds are not used properly then it may affect the running of the business. Thus we can say that financial management is a specialized function of management which is related to the procurement of funds and its effective utilization for the achievement of the common goal of the organization.