Financial management is an important part of enterprise management, which is based on the objective capital movement and financial relationship in the process of enterprise reproduction. The management of reproduction process by using value form is a comprehensive economic management work to organize capital movement and deal with financial relations.
Second, the characteristics of financial management
(A) financial management is a comprehensive management work. Financial management is not only an independent aspect of enterprise management, but also a comprehensive management work involving enterprise management.
(B) diversification of financial management functions. The basic function of financial management is financial decision-making, which also includes financial forecast, financial budget, financial control and financial analysis.
(C) The content of financial management is extensive. The contents of financial management mainly include: fund-raising management, current assets management, fixed assets management, intangible assets management, investment management, operating income management and profit management.
(D) The financial management information is forward-looking. Financial management can reflect the production and operation of enterprises, and the information it provides provides a forward-looking possibility for scientifically predicting the development trend of enterprise production and operation.
Third, the financial management objectives
Financial management goal refers to the ultimate goal of enterprise's financial activities.
(1) Maximize profits. Profit maximization refers to the continuous increase of enterprise profits through the management of enterprise financial activities, so as to maximize enterprise profits.
(2) Maximize shareholders' wealth. This view holds that the purpose of shareholders' entrepreneurship is to obtain more wealth, so the goal of financial management should be to maximize shareholders' wealth from the interests of shareholders.
(3) Maximize enterprise value. Maximizing enterprise value refers to maximizing enterprise value through reasonable production and operation, adopting the best financial decision, and considering the time value of money and the relationship between risk and reward. The financial management goal of joint-stock enterprises is to maximize the wealth of shareholders.
Fourth, the function of financial management.
Financial management function refers to the role and function that financial management should play. Including:
(1) financial forecast. Financial forecasting is based on the historical data of financial activities, considering the realistic requirements and conditions, and scientifically forecasting and calculating the future financial activities and financial achievements of enterprises. The main contents include: financing forecast, cost forecast, operating income forecast and profit forecast. The specific methods of financial forecasting mainly include: causal forecasting, time series forecasting and regression analysis forecasting.
(2) financial decision-making. Financial decision-making refers to that financial personnel choose the best scheme from multiple alternatives by using special methods under the overall requirements of financial management objectives. The main contents of financial decision include: financing decision, investment decision, cost decision, income decision and profit decision. The specific methods of financial decision-making mainly include: comparative analysis, linear programming, probabilistic decision-making, taking small from large and medium, taking small from medium, taking small from large and so on.
(3) financial budget. Financial budget is based on the information provided by financial forecast and the scheme determined by financial decision, and uses scientific technical means and mathematical methods to comprehensively evaluate the objectives, formulate main planned objectives, formulate measures to increase production and save money, and coordinate various planned indicators. It is the embodiment of financial forecasting and financial decision-making, and it is the basis of organizing and controlling financial activities. The main contents of financial budget include: financing budget, investment budget, cost budget, operating income budget and profit budget. The specific methods of financial budgeting mainly include: fixed budget and flexible budget, incremental budget and zero-based budget, regular budget and rolling budget.
(4) Financial control. Financial control refers to the use of relevant information and specific means to influence or adjust the financial activities of enterprises in the process of financial management in order to achieve the objectives stipulated in the financial budget. The main contents of financial control include: financing control, investment control, monetary fund revenue and expenditure control, cost control and profit control. The specific methods of financial control mainly include: planned control method, system control method, quota control method and so on.
(5) Financial analysis. Financial analysis is based on accounting data, using specific methods to analyze and evaluate the process and results of enterprise financial activities. The main contents of financial analysis include: solvency analysis, operational capacity analysis, profitability analysis, etc. The specific methods used in financial analysis are: comparative analysis, ratio analysis, trend analysis, etc.