Financial Management Essay

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Financial Management and the Markets
Businesses both large and small have competing priorities. Consumer demands, regulatory concerns, shareholder interests, and employee relationships all require attention from the business perspective. However, one of the highest priorities for any business is financial management. It is difficult, if not impossible, to meet the needs of a business without an adequate cash flow. In the short-term, financial deficits can be only a bump in the road, however long term cash flow difficulties indicate further intervention is needed. This further intervention is financial management. Finances in a business involve more than just an accounting of revenues and expenses. In order to be viable and ultimately successful, …show more content…

As stated above, there is more to financial management than just filling in cells on a spreadsheet. In fact, many of the factors causing a business’ failure involve management or rather mismanagement of money. Salazar, Soto, and Mosqueda (2012) reported on several studies indicating the cause of business failure are the lack financial planning, limited access to funding, lack of capital, excessive fixed-asset investment and overall capital mismanagement. Conversely, adequate finances allow a business to repay debt, pay dividends, buy investments, or reinvest the money back into the business itself (Brigham & Ehrhardt, 2015). In order to achieve adequate finances, a business must have sound financial management practices. This includes the sharing of relevant, reliable financial information to business decision makers as they plan where funds should be spent (Ugone, 2010). When performed adequately, financial management activities support the core of the business itself by ensuring cash is adequately managed allowing all stakeholders to …show more content…

Simply put, financial management is the management of a corporation’s money. For a business to grow and be successful, it must have sound financial management processes in place to ensure the ultimate goal of shareholder profit maximization is realized. The signs of a successful business point to the amount of cash flowing through accounts and resulting in an acceptable free cash flow left for distribution to shareholders. However, shareholders are not the only population of interest to a corporation. Financial management practices must also meet the needs of employees, consumer and other individuals in the general public to be successful. Short and long term markets The financial market and instruments used in these markets are what companies use to leverage their capital expenditures. By participating in the market through the selling of company shares or the issuance of bonds, a company can cash flow current growth opportunities to further the business’ value. It is imperative for a business to have sound financial management practices to be successful and meet the needs of investors, employees and

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