what is financial management

Financial management is the practice of handling an organizations finances in a way that allows it to be successful and compliant with regulations. It involves the strategic planning, organizing, directing, and controlling of financial activities such as procurement and utilization of funds of the enterprise. The main objectives of financial management are to optimize shareholder value, generate profit, mitigate risk, and safeguard the companys financial health in the short and long term. The scope of financial management includes investment decisions, financial decisions, and dividend decisions. Financial managers are specialized professionals who report directly to senior management and are responsible for the efficient acquisition and deployment of both short- and long-term financial resources to ensure the objectives of the enterprise are achieved. Financial management is important because it helps organizations to make informed financial decisions that affect financial stability both now and in the future.