Nature and Scope of Financial Management

The term financial management has emerged from the generic discipline of management. In order to understand financial management, it is better to start with an understanding the term management. Management, simply put, is all about securing the optimal use of the resources at the disposal of the firm towards the attainment of some predetermined goals. These resouces are of many kinds such as human capital, production machines, distribution channels etc.Resources are put under the charge of respective departments which have the responsibility of their management and control. Each department contributes towards the organisational objectives by effectively managing the resources they are controlling. Many terms such as capital, funds, cash flow, money etc. are used synonmously and interchangeably to describenfinancial resources. The finance department of the organisation is responsible for the financial management of the firm, which it does through the means of financial decision making.