How can I choose the best financial management framework?
Financial management deals with maintaining capital and growth of wealth value. The ideal framework of financial management not only maintains existing finances, but also uses investment and financial analysis to make more money. Several factors go into the selection of the ideal financial management framework. These factors include the size of the company, type of organization, available funds and overall financial objectives of the company.
Maximization of profit is one of the framework options. Within the framework of financial management Maximization of profits, financial managers deal with efficient use of capital within a given time frame. This framework option is a good choice for businesses dealing with short -term growth and routine maintenance of wealth.
Maximization of the wealth of shareholders is another option for financial management. The process of maximizing the wealth of shareholders is intended for corporations that have public or private investors who receive regular dividends. Financial managers are trying to have the largest amount of income per shareholderthe service part of the trading account. It can be an ideal choice for companies that have recently "published" the offer of shares on the commodity market.
different types of business structures have different financial management needs. Examples of business structures include exclusive ownership, partnership and corporations. The only property is often a small company with a framework of financial management aimed at reducing the costs and maintaining the company. General partnerships work similarly to exclusive ownership, except that there are more than one owner. Corporations often use profit maximization or maximize the financial management techniques.
The company's financial manager will usually be a person who recommends the funds for management of AL and implements any financial management techniques. Among the types of financial managers are vice presidents for finance, also known as financial officers (CFO). Cfo usuallyReports the CEO of the Company (CEO). Other financial managers include the treasurer of the company and the controller.
Most commercial finance administration will depend on current market circumstances. Companies finance initial efforts through cash obtained from the sale of securities such as stocks. Securities may not be sold if the market is shortage due to a bad economy or poor public opinion of the company. In these cases, the possible financial framework could change, perhaps to maximize the tactics of the wealth of shareholders for the technique of maximizing profits.
Risk is another factor of financial management. Businesses risk wealth to gain wealth. Risk types include investment, buying other businesses and buying, such as securities or debt. When considering capital, the total financial framework and market circumstances should be taken into account.