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Financial management is the business function concerned with profitability, expenses, cash and credit. These are often grouped together under the rubric of maximizing the value of the firm for stockholders .
Financial risk management is the practice of protecting economic value in a firm by managing exposure to financial risk - principally credit risk and market risk, with more specific variants as listed aside - as well as some aspects of operational risk.
Therefore, Strategic Financial Management are those aspect of the overall plan of the organisation that concerns financial management. This includes different parts of the business plan, for example marketing and sales plan, production plan, personnel plan, capital expenditure, etc.
The mean and objective of both domestic and international financial management remains the same but the dimensions and dynamics broaden drastically. Foreign currency, market imperfections, enhanced opportunity sets and political risks are four broader heads under which IFM can be differentiated from financial management (FM).
Performance management — developing the practice of business decision-making and managing the performance of the organization; Risk management — contributing to frameworks and practices for identifying, measuring, managing and reporting risks to the achievement of the objectives of the organization
Later research [26] has shown that the financial benefits of risk management are less dependent on the formula used but are more dependent on the frequency and how risk assessment is performed. In business it is imperative to be able to present the findings of risk assessments in financial, market, or schedule terms.
To prevent personal financial mismanagement it is important to have financial education from an early age. For a business to succeed in their finances it is crucial to employ people with the right qualifications and experiences and to continuously appraise the financial state within the business. [15] See Financial risk management § Corporate ...
Managerial finance is the branch of finance that concerns itself with the financial aspects of managerial decisions. [1] Finance addresses the ways in which organizations (and individuals) raise and allocate monetary resources over time, taking into account the risks entailed in their projects; Managerial finance, then, emphasizes the managerial application of these finance techniques and ...