Management is a system for managing a specific object and includes various techniques, methods and forms of management. The object of management of financial management is the company's finances. Financial management can be viewed as a separate scientific discipline or as a type of management activity.
Features of financial management as a science
As a scientific direction, financial management appeared at the beginning of the 20th century in the United States. Initially, this discipline looked at the aspects of starting a new company. In the middle of the 20th century, G. Markowitz developed the portfolio theory, on the basis of which a model for assessing the profitability of financial assets was created several years later. This model made it possible to assess the risk and return of a portfolio of financial assets. At the same time F. Modigliani and M. Miller began to conduct research in the field of assessing the capital structure of companies.
For the Russian economy, financial management is a relatively new scientific discipline. Its appearance was caused by the development of a market economy and is associated with an increase in the importance of the financial aspects of economic activity.
Now financial management takes its place in the system of economic sciences. On the one hand, this scientific discipline is part of management. On the other hand, financial management borders on many applied economic sciences. This discipline includes elements of management accounting, economic analysis, taxation, statistics, pricing and other applied scientific disciplines.
Features of financial management as a type of management activity
Financial management includes strategic and tactical capital management of an enterprise. Strategy defines the general direction, and tactics - the specific techniques and methods used to achieve the goal.
The main goal of financial management is to improve the well-being of the owners of the enterprise. To achieve this goal, a financial manager at an enterprise must strive to optimize cash flows, minimize company risks, as well as achieve financial stability of the organization in the process of its development and maximize profits.
Features of financial management as a type of management activity are reflected in its functions. The planning function is associated with the development of the company's strategy and the formation of its pricing policy.
The implementation of the function of forming the capital structure allows you to determine the company's needs for financial resources. In performing this function, financial management must analyze the sources of funding and calculate the price of capital used.
The function of developing an investment policy is associated with a comprehensive investment analysis. The financial manager must assess the investment attractiveness of financial assets, select the most effective financial instruments and form the optimal investment portfolio of the company.
The function of working capital management is to improve the efficiency of managing the company's working assets. When performing this function, it is necessary to form an optimal structure of assets and ensure the company's liquidity.
The implementation of the function of analyzing financial risks allows you to identify, analyze and predict all the risks associated with the company's activities.
