Financial management is a system of principles and methods for developing and implementing management decisions associated with the formation, distribution and use of financial resources of the enterprise and the organization of its cash turnover.
Effective financial management of the enterprise is provided by implementing a number of principles (see figure 1).
Integration with the overall system management. In whatever sphere of activity of the enterprise does not make management decisions, it is directly or indirectly affects the formation of the cash flows and financial performance. financial management, direct production management, innovation management, management personnel and certain other types of functional management. This determines whether an organic integration of financial management with the overall system management.
The complex nature of the formation of managerial decisions. All management decisions in the formation, distribution and use of financial resources and organization of the company cash flow are closely interrelated and have a direct or indirect impact on the results of its financial activities. In some cases, this effect may be contradictory. For example, the implementation of high-yielding financial investment can cause a deficiency in the financing of productive activities and as a result - significantly reduce the size of the operating profits (i.e., reduce the potential for the formation of their own financial resources). Therefore, financial management should be considered as an integrated management system that ensures the development of interdependent managerial decisions, each of which contributes to the overall effectiveness of the financial activities of the enterprise.
High dynamic control. Even the most effective management decisions in the formation and use of financial resources and optimize cash flow, developed and implemented at the enterprise previous period can always be re-used in subsequent stages of his financial activities. First of all, this is due to the high dynamics of environmental factors on the transition to a market economy, and in the first place - to the changing financial market. In addition, the change in time and the internal conditions of the enterprise, especially in the stages of transition to subsequent stages of its life cycle. Therefore, financial management should be characterized by a high dynamism, taking into account the change in environmental factors, resource potential, forms of organization of production and financial performance, financial condition and other parameters of the enterprise.
Focus on strategic goals of the enterprise. No matter how effective did not seem certain project management solutions in the field of financial performance in the current period, they must be rejected if they conflict with the mission (the main purpose of the) company, the strategic directions of its development, undermining the economic base of the formation of higher dimensions of their own financial resources from domestic sources in the coming period.
Effective financial management, organized by the light of theprinciples thatallows you to createthe necessaryresource potentialhighgrowth rate ofoperatingcompaniesto ensurecontinued growthof equity capital, significantly improve itscompetitive positionin the commodityand financial markets, to ensure stable economic development, strategic perspective.
Given thecontentof financial managementformulatedits goals and objectives.
The main purposeof financial managementis to maximize thewelfare ofthe owners ofbusinessesin the currentand futureperiodafordedby maximizingits market value.
Ensure maximization of company profits in the foreseen level of financial risk. Profit maximization is achieved through effective asset management company, engaging in the commercialization of borrowed funds, selecting the most effective ways of operating and financial performance. Thus, to achieve the goals of economic development entity shall not seek to maximize the gross and net profits, remaining at his disposal, which requires the implementation of effective tax, depreciation and dividend policy. Solving this problem should be borne in mind that to maximize the profits of the enterprise level is reached, usually with a significant increase in the level of financial risks, as between these two figures there is a direct connection. Therefore, profit maximization should be provided within an acceptable financial risk, the specific level is established by the owners or managers of enterprises according to their risk preferences (related to the degree of acceptable risk in carrying out economic activities).