Methods of financial management

Financial management in enterprises is usually handled by managers and financial directors. Their responsibility is to create a system of financial relations of the enterprise, as a separate business entity. To create such a system and its operation, any information of a financial nature is used. These are accounting data at the enterprise, information of banks and various stock exchanges (stock, currency, commodity),

Methods of financial management are extensive. These include concepts such as forecasting, planning, insurance, self-financing and lending.

Financing of the enterprise is carried out through self-financing and bank lending. Self-financing is usually done with the help of

Capitalization of some share of profit The loan amount of the bank depends on the results of the bank's analysis of the economic activities of the enterprise and forecasting the possibilities for its return. The costs of the enterprise include interest for using the loan. You can attract capital by another way - by issuing bonds and placing them with investors or the public. This type of lending, unlike banking, is long-term. Part of the capital can be attracted by the issue of shares, in which case their owner will have the right to participate in the financial process and the right to receive dividends.

Methods of financial management include financial analysis and planning. Planning allows you to assess financial needs and distribute the financial flow in the necessary areas. At this stage, the financial statements are prepared, allowing you to learn objective data about the financial flow, the required borrowed funds and comparison of planned and actual indicators. Planning determines the further economic strategy of the enterprise on the basis of the analyzed data.

In the methods of financial management, you can include a system of financial sanctions, incentives, leases, and pricing principles.

Any financial system can not exist on its own. It is guided by the laws, decrees, decisions and orders of the President, the Government and the Cabinet of Ministers.

What are the principles of organization of financial management? This is the definition of strategy and focus of activities, as well as planned and systematic.

Planning in general for the enterprise and its units is aimed at

Organization of production, distribution of cash and labor resources within

Economic unit. Knowing the principles of work, it is not difficult to identify the tactical goals of financial management. Of course, the primary goal of any enterprise is to make profit, increase productivity, implement innovative projects, and become famous on the market. Using the principle of multidisciplinarity makes it possible to increase the stability of an enterprise in a competitive battle, and investing in securities provides guarantees for its saving.

The principle of strategic orientation makes it possible to determine the boundaries and the framework for the development of the enterprise, the search for new options for allocating capital, the introduction of innovations.

The search for new ways of development requires new investments of capital, which is not always justified in unstable financial activities or in a crisis, since it requires a rapid allocation of capital in this direction. Getting a profit in this period is not always guaranteed.

Methods of financial management are designed to ensure the stability of the company in any conditions and guaranteed availability and growth of profitability.