Learn More about Business Financial Management

 


Many individuals trained in finance have professional jobs at non-financial companies (manufacturers, airlines, retailers), or in government and not-for-profit agencies.

These types of organizations have always employed people in management activities associated with financial budgeting, financial forecasting, financial control, raising funds, and maintaining relationships with banks. All these activities have become especially important for corporations and other organizations as new information technology has made it possible for financial market participants to constantly monitor businesses' financial performance. Stockholders and potential stockholders continually watch how companies use the non-financial products they make and sell to create financial returns for investors. As a result, non-financial companies rely heavily upon financial managers.

Business Financial Management can be divided, for simplicity, into three main areas: cash management, capital budgeting, and funding management.

  1. In cash management, the financial manager optimizes a firm's holding of cash and other liquid assets.
  2. In capital budgeting, the financial manager evaluates the potential profitability of the firm's investment in fixed assets based on a chosen rate-of-return criterion.
  3. In funding management, the financial manager strives to find the mix of debt and equity funding sources that minimizes the firm's financing cost and maximizes its overall value.