Explain the importance of financial management.

Financial management provides pathways to attain goals and objectives in an organisation. The main duty of a financial manager is to measure organisational efficiency through proper allocation, acquisition and management.

The importance of financial management is explained below −

• It provides guidance in financial planning.
• It assists in acquiring funds from different sources.
• It helps in investing an appropriate amount of funds.
• It increases organisational efficiency.
• It reduces delay production.
• It cut down financial costs.
• It reduces cost of fund.
• It ensures proper use of fund.
• It helps business firm to take financial decisions.
• It prepares guideline for earning maximum profits with minimum cost.
• It increases shareholders’ wealth.
• It can control the financial aspects of the business.
• It provides information through financial reporting.
• It makes the employees aware of saving funds.