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Financial Management

 

            Financial Management consist of determining which funds are used for current and fixed assets, provide efficient financing, and making dividend policies that coincided with the organizations objectives. The finance manager has daily, occasional, and profitability risk decisions. These decisions are intertwined and affect all aspects of the organization's financial decisions. The field of finance has changed over the century. In the early part of the century the focal point of finance dealt with reformatting organizations, bank policies and money preservation. By the middle of the century, financial matters moved toward analyzing the market to make the best profitable decision. Today with the inflation of the rise companies are evaluating the risk factor associated with these decisions. The advancements in new technology have opened a whole new world full of added risk and profit potential. These new avenues of approach have made dealings with customers and suppliers easier because e-commerce provides fast cash flow rotations. There are three types of organizations: sole proprietor, partnership, and corporation. The sole proprietor has one owner and the profits are taxed only as income to the owner. A partnership has two or more owners that are formed through the articles of partnership. The details of ownership interest and distribution of profits or losses are in the articles of partnership. All partners are responsible for losses however they may be inequitably distributed if one partner is wealthier. This is where limited liability partnership is formed. The limited liability curtails the losses by making the party only responsible for his original contribution. A corporation is a legal entity that is formed through the articles of corporation. The main disadvantage to a corporation is that there is double taxation. The role of the financial manager is difficult at time. They have to be in tune with the organizations goal as well as the shareholders goals.


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