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Infographic: Financial Management

Infographic: Financial Management

The document Infographic: Financial Management is a part of the Commerce Course Business Studies (BST) Class 12.
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FAQs on Infographic: Financial Management

1. What is financial management in commerce?
Ans. Financial management in commerce refers to the strategic planning, organising, directing, and controlling of financial activities such as procurement and utilisation of funds. It aims to ensure that a business can achieve its financial goals through effective management of resources, risk assessment, and investment decisions.
2. What are the key objectives of financial management?
Ans. The key objectives of financial management include maximising shareholder wealth, ensuring liquidity to meet obligations, optimising capital structure, and maintaining an adequate return on investment. These objectives help businesses sustain growth and enhance their overall financial health.
3. How does budgeting play a role in financial management?
Ans. Budgeting is a critical component of financial management as it involves forecasting future financial performance and allocating resources accordingly. It helps businesses plan for revenues and expenses, monitor financial performance, and make informed decisions based on deviations from the budget.
4. What are the major sources of finance for businesses?
Ans. Major sources of finance for businesses include internal sources such as retained earnings and external sources like equity financing, bank loans, debentures, and venture capital. Each source has its implications for cost, control, and financial risk, influencing a company's capital structure.
5. What is the significance of financial ratios in financial management?
Ans. Financial ratios are essential tools in financial management as they provide insights into a company's performance and financial health. They help assess profitability, liquidity, efficiency, and solvency, enabling stakeholders to make informed decisions regarding investments and operational strategies.
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