Briefly describe the basic activities and main content of financial management

A basic activity

Financial management is an integral part of business management, it is based on financial regulations and systems, in accordance with the principles of financial management, the organization of corporate financial activities, financial relations of an economic management.

Simply put, financial management is the organization of enterprise financial activities, dealing with financial relations of an economic management work. Financial management is the study of how to plan, decision-making, control, assessment, supervision and other management activities on the management of capital movements, in order to improve the efficiency of capital of a business management discipline.

Second, the main content:

Enterprises in the production and operation process, constantly occurring in various forms of capital income and capital expenditure, the income and expenditure of these funds constitutes an independent aspect of business activities, that is, financial activities. Financing, investment, operation and distribution constitute the main content of the basic financial activities of enterprises, they are interlinked, mutual constraints.

Raising funds is the most basic requirements of enterprise financial management, leaving the funds required for the operation of the financing, the enterprise can not survive and develop. The funds raised by the enterprise must be effectively used for production and operation activities in order to achieve profitability, in order to realize the purpose of financing, and constantly increase the value of the enterprise. The amount of enterprise fund-raising will constrain the scale of investment, and investment in turn determines the scale and timing of the enterprise needs to raise funds.

At the same time, fundraising and investment need to rely on the operation of funds to realize, enterprises need to carry out reasonable management and control of working capital, and strive to improve the efficiency and effectiveness of the use of working capital. Because financing includes short-term financing and long-term financing, investment also includes short-term investment and long-term investment, and short-term financing, short-term investment and operating cash flow often have a close relationship, usually combined together called capital operation.

Profit and its distribution is the result of the above aspects **** the same role, and at the same time will have the opposite effect on the above aspects.

Financial management is based on financial regulations and systems, in accordance with the principles of financial management, the organization of corporate financial activities, financial relations, an economic management activities, it is an important part of enterprise management. Financing management, investment management, working capital management, profit distribution management constitutes the basic content of financial management.

Expanded Information

Objectives of Financial Management

Enterprise financial management as a component of enterprise management, its overall objective should be consistent with the overall goal of the enterprise, that is, to create more wealth through production and operation activities, and constantly increase the value of the enterprise.

On the expression of the goal of enterprise financial management, there are mainly the following three points of view:

(1) profit maximization as the goal.

(2) Maximization of shareholders' wealth as the goal.

(3) Maximizing enterprise value as the goal.

Enterprise value can be understood as the market value of the owner's and creditor's interests in the enterprise, or the present value of the expected future cash flows that the enterprise can generate.

The goal of maximizing enterprise value requires an enterprise to maximize the total value of the enterprise through optimal financial management policies, taking full account of the time value of money, risk and reward, and on the basis of ensuring the long-term stable development of the enterprise.

Baidu Encyclopedia-Financial Management