Financial Management

Abstract

Financial management is one of the traditional functional areas of management, found in any organization, and shall be responsible analysis, decisions and actions related to the financial means to the activity of the organization. Thus, the finance function integrates all tasks related to achievement, use and control of financial resources. This paper aims to analyze the financial management and its core issues. The other aim of paper is to provide a significant insight into risk management issues by describing the main types of such risks and by providing management and evaluation procedures of significant risks into different banks and organizations. In times of crisis, risk management in the banking system has a greater importance than in the normal economic times. The 2008 was a year in which many countries have been hit by the repercussions of the international economic crisis. Using strategies against risks, implementing procedures to monitor and control risks, risk assessment and quantification can substantially reduce the financial losses of a company or those of a financial institution.

Table of Contents

Abstract2

Introduction4

Purpose and Functions5

Development of the modern financial theory to financial management6

Financial Management Theory7

Risk8

Investment Operational8

Acquisitions9

Stakeholders10

Stakeholders Analysis11

Management of stakeholders13

Compensation of shareholders14

Risk Management15

Types of financial risks15

Multiple Challenges of Risk Management16

Resolving high Risk issues18

Corporate Risks18

Risks of national and international financial system18

Conclusion19

References21

Financial Management

Introduction

Financial management is to the actual execution of approved expenditure budget. This execution is done through different stages, beginning with the authorization of expenditure and ending with your payment materials. Financial Management aims to manage the movement of financial resources and financial relations that arise between economic agents in the movement of financial resources (Eun & Resnick, 2004). The question is how skillfully direct the movements and relationships, is the subject of financial management. Financial management is the process of developing goals of financial management and implementation of impact on the finances with the help of methods and instruments of the financial mechanism for achieving this goal (Ross, 2008).

Thus, financial management includes strategy and tactics of control. Under the strategy, in this case refers to the overall direction and how to use the tools to achieve this goal. Different methods correspond to a certain set of rules and constraints for decision making. The strategy allows you to focus on options for solutions, not inconsistent with the adopted strategy, rejecting all other options. The task of management is the tactical choice of the optimal solution and the most appropriate in this economic situation, methods and techniques of management. This paper aims to analyze the financial management and its core issues (Brigham, 1998). The other aim of paper is to provide a significant insight into risk management issues by describing the main types of such risks and by providing management and evaluation procedures of significant risks into different banks and organizations (Ross, 2008).

Purpose and Functions

The purpose of financial management is to maximize profits, welfare enterprises with sound fiscal policy (Crowther, 2004). Financial Management objectives include:

Ensuring the most effective use of financial resources.

Optimizing cash flow.

Optimization of ...