Section a financial management function
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Section A: Financial Management Function. Designed to give you knowledge and application of:. A1. The nature and purpose of financial management A2. Financial objectives and relationship with corporate strategy A3. Stakeholders and impact on corporate objectives.

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Section A: Financial Management Function

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Section a financial management function

Section A: Financial Management Function

Designed to give you knowledge and application of:

A1. The nature and purpose of financial management

A2. Financial objectives and relationship with corporate strategy

A3. Stakeholders and impact on corporate objectives


Section a financial management function

A1: The nature and purpose of financial management

Learning Outcomes

  • Nature and purpose of financial management.

  • Relationship between financial management and management accounting.


Section a financial management function

Nature and purpose of financial management

Financial management: efficient and effective management of moneyforaccomplishment of organisation’s objectives.

Flow of finance


Section a financial management function

Nature of financial management

all decisions are interdependent

Nature of financial management

Investment decisions

Working capital (WC) management decisions

Financial analysis

Financing decisions

Dividend decisions

  • equity finance

  • debt finance

  • optimal level of WC

  • form of WC

  • funds for WC

  • acquisition of non-current assets

  • retention of funds generated

  • distribution to shareholders

  • forms the basis for making financial decisions


Section a financial management function

Financial management

Financial accounting

Management accounting

Investment management

SOFP (balance sheet)

Budgeting

Funding management

SOCI (Income statement)

Product profitability

Working capital management

Statement of cash flows

Short term cost analysis and control

Dividend policy

Statutory Compliance

Aids decisions, perf mgt & control

Uses past and future information

Uses past information

Uses past, present and future information

Relationship between financial management and financial and management accounting


Section a financial management function

Recap

  • Nature and purpose of financial management.

  • Relationship between financial management and management accounting.


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