Financial management is all about efficient and effective management of the monetary resources of an organization.
The objectives of financial management are profit maximization (including maximization of shareholders wealth), financial decision making (future proof) and maintaining proper cash flow.
This all is necessary to secure operations in order to pay the day-to-day expenses, wages, etc. Cash flow is an important indicator on how healthy a company financially is. Next to that, there are a lot of other ratios and financial tools that can help the finance manager to get more grip on financial management. Many theories can be found for the financial area, they are geared towards analysing and calculating business turnovers.
There have been lots of scientific and practical studies on finance and management for a learning point of view.
What are the most known and used financial models and methods? What are their success stories and practical tips when you apply these? These posts are all about great financial management tools.
Internal Rate of Return (IRR) is the expected return on an investment that companies can do. The profitability of potential investments is calculated and the level and timing of the cash flows of both the potential returns of the investment and all the expenditures involved are taken into account.