SCOPE OF FINANCIAL MANAGEMENT

SCOPE OF FINANCIAL MANAGEMENT

As an integral part of the overall management, financial management is mainly concerned with acquisition and use of funds by an organization. Based on financial management guru Ezra Solomon’s concept of financial management, following aspects are taken up in detail under the study of financial management:

(a) Determination of size of the enterprise and determination of rate of growth.

(b) Determining the composition of assets of the enterprise.

(c) Determining the mix of enterprise’s financing i.e. consideration of level of debt to equity, etc.

(d) Analysis, planning and control of financial affairs of the enterprise.

The scope of financial management has undergone changes over the years. Until the middle of this century, its scope was limited to procurement of funds under major events in the life of the enterprise such as promotion, expansion, merger, etc. In the modern times, the financial management includes besides procurement of funds, the three different kinds of decisions as well namely investment, financing and dividend.