THE ROLE OF FINANCIAL MANAGEMENT
Financial
management is the management of the financial functions . Financial functions
include fantasize obtain funds ( raising of funds) and how to use these funds (
allocation of funds) . Financial managers are concerned with the determination
of the amount of eligible assets from investments in various asset and choose
the sources of funds to finance these assets. To obtain funds , financial
managers can obtain it from inside and outside the company. Sources from
outside the company derived from the capital market , could take the form of
debt or equity capital.
Financial
management can be defined from the duties and responsibilities of a financial
manager . The principal tasks of financial management , among others, include
the decision to invest , finance and business activities of a company dividend
, thus the task of the financial manager is to plan to maximize the value of
the company . Another important activity to do financial managers regarding
four aspects:
1.
Financial managers must collaborate with other
managers who are responsible for the general planning of the company.
2.
Financial managers must focus on investment and
financing decisions , and various things related to it.
3.
Financial managers must cooperate with the
managers in the company so that the company can operate as efficiently as
possible.
4.
The financial manager should be able to connect
the company with the financial markets , where companies can obtain funds and
securities can be traded company.
Another
important aspect of the company's goals and objectives of financial management
is the consideration of social responsibility that can be viewed from four
aspects , namely :
1.
If memeksimalisasi financial management led to
the share price , it would require good management and efficient according to
consumer demand.
2.
Successful companies always put efficiency and
innovation as a priority , resulting in new products , new technology invention
and expansion of employment.
3.
External factors such as environmental pollution
, product safety assurance and safety becomes more important to consider .
Fluctuations in all levels of business activity and the changes that occurred
in the conditions of financial markets is an important aspect of the external
environment.
4.
Cooperation between industry and government is
needed to create regulations governing corporate behavior , and vice versa
companies comply with these regulations . The company's goal is basically
memeksimumkan value of the company with technical considerations.
Basically the goal
of financial management is to maximize corporate value . But behind these
objectives is a conflict between the owner of the company with funds providers
as creditors . If the company goes well , the company's stock value will
increase , while the value of corporate debt in the form of bonds is not
affected at all. So it can be concluded that the value of stock holdings could
be an appropriate index to measure the level of efektifitias company . Based on
these reasons , the financial management objectives expressed in terms of
maximizing the value of company stock holdings , or to maximize the stock price.
The goal of maximizing the share price does not mean that managers should seek
increase in value of the shares at the expense of bondholders.
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