Financial Management can be defined as the activity of planning, organizing, actuating, and controlling of funds held by an organization or company. The content itself can be diversivied in wide area of business. Any business needs financing so that business can be run, improved, and expand. Maybe you already know that the finance of business must be manage wisely.
Financial management involves
managing the finances of a business. Financial managers, people who manage a
business firm's finances perform a number of tasks. They analyze and forecast a
firm's finances; assess risk, evaluate investment opportunities, decide when
and where to find money sources and how much money to raise, and decide how
much money to return to the firm's investors.
This time, we will describe a
little about 10 Principles of Financial Management. 10 Principles of Financial Management consist of:
3. Cash is the King,
, 5. The
Curse of Competitive Market,
6. Efficient
Capital Market,
7. The
Agency Problem,
8. Tax
Bias Decision,
9. All
Risk isn’t Equal, Some Risk Can Be Diversified Away,
10. Ethical
Behavior is Doing the Right Thing.
10 Principles of financial management is an axiom. Axiom itself is something that is not necessary
to be scientifically proved. People just believe in
that principle and often use axiom as base of decision making (in this term it's all about finance). Since old times,
people just follow this rules in the world of business. While some others maybe
not follow this rule and implementing another rule. But this “10 Principles ofFinancial Management” is used in school, university, other education, and even
in business in many countries.
Unfortunately, the
world of business and finance is continuing to evolve. The complexity of
business is always improve. Maybe someday this 10 Principles of FinancialManagement will expired and replace with new principles. Therefore, we must
always continue to learn in order to enrich our knowledge especially about finance.
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