Financial Management

Financial management deal with how the corporation obtains the funds and how it uses them. It includes financial planning, financial administration, financial control. It is the specialized function which is directly associated with the top management.

Objectives of financial management:-

1. profit maximization:- Profit maximization happens when margin cost is equal to marginal revenue. This is the main objective of financial management.

2.Wealth Maximization:- Wealth maximization means maximization of shareholders wealth.

3. maintaining Proper:- Cash flow is another objective of financial management. A good cash flow ensures the survival of company.

• Function of Financial management  

1. Financial forecasting and planning:- A financial manager has to estimate the financial needs of a business. How much money will be required for acquiring various assets.
2. Acquisition of Funds:- After making financial planning, the next step will be to acquire funds. There are number of source available for funds such as shares, financial institution, bank etc.
3. Investment of Funds:- The funds should be used in the best possible way so that profit can be achieved.
4.  Management of Cost:- The management of cost is required for many purpose like payment of wages and salaries, bills, maintenance of stock raw materials etc.
5. Financial Controls:- Financial manager not only has to plan and utilize funds but he also has to control over finances. This can be done by many techniques such as financial forecasting ratio analysis etc.

Capital:- 

• The money that is used to run a business is called capital. 
• It is tracked according to how it is used, and different kinds of investments produce different type of benefit for a company.
• The way money is spent on a business's needs determines whether it is fixed capital investment of a working capital investment. Capital is cover all the element such as money, land machinery, material etc.

Type of Capital

• The forms, classification or type of capital are:-

1. Fixed Capital:- It refers to durable capital goods which are used in production again and again till they wear out. e.g:- Machinery, tools, furniture, factory, building etc are fixed capitals.
2. working Capital:- It refers to the single use produced goods like raw materials. They are used directly and only once in production. They got converted into finished goods. e.g:- payment of employee, cost of raw material, transport etc.

• Difference between Fixed Capital and Working Capital:-

Source of Finance

1. Retained earning
2. Bank or other saving
3. Different type of loan.
4. Corporate bank
5. Debenture
6. Share Capital
7. Public Capital
8. Addition Partner to the business.