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FINANCIAL 
MANAGEMENT
Page 2


FINANCIAL 
MANAGEMENT
Outline:
? Definition
? Financial Management Process
? Importance Of Financial Management
? Who is Responsible for Financial Management
? Principles of Financial Management
? Four Building Blocks of Financial  Management 
? Financial And Management Accounting 
? Conclusion 
Page 3


FINANCIAL 
MANAGEMENT
Outline:
? Definition
? Financial Management Process
? Importance Of Financial Management
? Who is Responsible for Financial Management
? Principles of Financial Management
? Four Building Blocks of Financial  Management 
? Financial And Management Accounting 
? Conclusion 
What is Financial Management ?
Financial management  is the efficient and 
effective 
management of (funds) in such a manner as to 
accomplish the objectives of the organization. 
It is the planning, organizing , controlling and
monitoring of the financial recourses of an 
organization.
Page 4


FINANCIAL 
MANAGEMENT
Outline:
? Definition
? Financial Management Process
? Importance Of Financial Management
? Who is Responsible for Financial Management
? Principles of Financial Management
? Four Building Blocks of Financial  Management 
? Financial And Management Accounting 
? Conclusion 
What is Financial Management ?
Financial management  is the efficient and 
effective 
management of (funds) in such a manner as to 
accomplish the objectives of the organization. 
It is the planning, organizing , controlling and
monitoring of the financial recourses of an 
organization.
Financial management process
They are:
? Managing scarce resources
? Managing risks
? Managing strategically
? Managing by objectives
Page 5


FINANCIAL 
MANAGEMENT
Outline:
? Definition
? Financial Management Process
? Importance Of Financial Management
? Who is Responsible for Financial Management
? Principles of Financial Management
? Four Building Blocks of Financial  Management 
? Financial And Management Accounting 
? Conclusion 
What is Financial Management ?
Financial management  is the efficient and 
effective 
management of (funds) in such a manner as to 
accomplish the objectives of the organization. 
It is the planning, organizing , controlling and
monitoring of the financial recourses of an 
organization.
Financial management process
They are:
? Managing scarce resources
? Managing risks
? Managing strategically
? Managing by objectives
? Managing scarce resources:
Organizations operate in a competitive environment where 
funds are increasingly scarce. We must therefore make sure 
that funds and resources are used properly and to the best 
effect to achieve the organization’s mission and objectives.
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FAQs on PPT - Financial Management - Business Studies (BST) Class 12 - Commerce

1. What is financial management in commerce?
Ans. Financial management in commerce refers to the strategic planning, organizing, directing, and controlling of an organization's financial resources to achieve its objectives. It involves managing various financial aspects such as budgeting, forecasting, investment decisions, risk management, and financial reporting to ensure the efficient utilization of funds and maximize profitability.
2. How does financial management help in the growth of a business?
Ans. Financial management plays a crucial role in the growth of a business by providing a framework for making informed financial decisions. It helps in identifying investment opportunities, analyzing the financial viability of projects, and allocating resources effectively. Additionally, financial management aids in managing cash flow, reducing financial risks, and optimizing the capital structure, thus contributing to the overall growth and profitability of the business.
3. What are the key components of financial management in commerce?
Ans. The key components of financial management in commerce include financial planning, budgeting, financial analysis, investment decisions, risk management, and financial reporting. Financial planning involves setting financial goals and developing strategies to achieve them. Budgeting involves allocating financial resources and tracking expenses. Financial analysis helps in assessing the financial performance and making informed decisions. Investment decisions involve evaluating investment opportunities. Risk management involves identifying and mitigating financial risks, and financial reporting involves preparing financial statements and reports.
4. How does financial management help in managing cash flow?
Ans. Financial management helps in managing cash flow by monitoring and controlling the inflow and outflow of cash within an organization. It involves forecasting cash inflows and outflows, ensuring sufficient liquidity to meet financial obligations, optimizing cash utilization, and implementing effective cash management strategies. By maintaining a stable cash flow, businesses can avoid liquidity issues, manage working capital efficiently, and meet their short-term financial requirements.
5. What are the benefits of effective financial management in commerce?
Ans. Effective financial management in commerce offers several benefits, including: - Improved decision-making: It provides accurate and timely financial information, enabling informed decision-making. - Enhanced profitability: It helps in optimizing resource allocation, reducing costs, and maximizing profitability. - Risk mitigation: It aids in identifying and managing financial risks, ensuring the stability and sustainability of the business. - Efficient capital utilization: It helps in allocating financial resources effectively, minimizing wastage, and maximizing returns on investment. - Better financial planning: It allows for setting realistic financial goals, developing strategies, and monitoring progress towards achieving them. - Compliance with regulations: It ensures adherence to financial regulations and reporting requirements, avoiding legal and financial penalties.
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