Question

What are the main objectives of financial management? Briefly explain.

Answer 1

The main objectives of financial management are:

(i) Effective utilisation of funds by ensuring that the benefits of an investment exceed its costs

(ii) To raise funds at minimum cost and minimum risk, through effective financing decision

(iii) To ensure the safety of funds by creating reserves. reinvesting profits etc.

(iv) To maintain financial liquidity and profitability through a working capital decision