What is Financial Management?

The financial management of a company consists in carrying out the tasks of planning, organizing and controlling all the accounting operations of the company, in order to use its resources efficiently.

The main functions of the financial management of a company are the preparation of financial statements, balance sheets, profit and loss accounting, investment valuation, etc. To expand your knowledge, also learn about the duties of a finance director.

To do a good job with financial management, one must have certain financial knowledge, which can be acquired through Finance master that at EIA University we have for you.

  1. Goals of financial management
  2. Financial management functions
  3. What does a financial manager do?
  4. Why Study a Masters in Finance?

Goals of financial management

The goals of financial management are formulated as the desired result of the company's financial activity, ensuring the achievement of its goals, which are:

  • Obtain benefits for a long period of time: be able to maximize these benefits, to continue investing.
  • Increase the market value: The financial management of a company seeks to increase the capitalization of the company, which brings the advantage that the amount of profits will multiply for the shareholder companies.
  • Maintain liquidity and solvency: All financial management objectives are interrelated and mutually beneficial. The company's profit growth is closely related to liquidity, ie its ability to pay all its debts, and solvency, ie the management of accounts.

Financial management functions

Financial management functions include a number of managerial influences aimed at solving the above tasks to achieve its goals. One of the main functions is financial analysis and planning by means of financial information indicators, collection and processing of accounting data for internal financial management and external indicators.

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Planning is the process of setting goals, defining tasks, and developing a decision model for choosing means of achieving those goals and solving those tasks. Financial planning is an important component of planning the activities of the state and economic entities.

What does a financial manager do?

The Chief Financial Officer is a key figure in the business as he is in charge of obtaining, using and overseeing the funds that will keep the business running and generate profits. The Chief Financial Officer performs the following functions:

  • Prepare the financial model: One of the CFO's functions is to develop the company's financial model based on its current and historical data.
  • Planning and budgeting: Based on economic indicators, the CFO must estimate the costs of the enterprise to balance them with profits.
  • Manage investments and financing: One of the most important tasks of the CFO is to develop an investment and asset management policy, finding new opportunities for the company to invest the profits obtained.
  • Evaluate the feasibility of projects: Responsible for the analysis of the company's development projects.
  • Monitor the use of company resources: make sure the company meets its financial obligations, such as payments to workers and suppliers.
  • Manage financial staff: take over the finance department of the company, so that in his day-to-day he will have to lead a team of people and participate in the management decision-making process.
  • Solve financial problems: assess financial risks, be aware of the economic problems the company is going through and propose feasible solutions to minimize their impact.
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Why Study a Masters in Finance?

The Master's program in Finance is aimed at professionals who work as analysts, bosses, directors or managers in organizations in the real or financial sector, or professionals who wish to project themselves into this type of position. Graduates from all areas of knowledge can apply, who need to qualify, deepen and specialize their financial skills for reasons of professional practice.

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