Goals act as motivators, serve as the standards for measuring performance, help in coordination of multiplicity of tasks, facilitate in identifying inter departmental relationships and so on.
Goals of
Financial Management
Goals act as motivators, serve as
the standards for measuring performance, help in coordination of multiplicity
of tasks, facilitate in identifying inter departmental relationships and so on.
The goals can be classified as official goals, operative goals and operational
goals.
The official
goals are the general objective of any organization. They include mechanism
of ROI and market value of the firms.
The operative
goals indicate the actual efforts taken by an organization to implement
various plans, policies and norms.
The operational
goals are more directed, quantitative and verifiable. In fine, it can be
inferred that the official, operative and operational goals are set with a
pyramidal shape, the official goals at the helm of affairs (concerned with top
level executives) operative goals at the middle level and operational goals at
the lower level.
Following are the other objectives of financial management.
a. To build up reserves for growth and expansion
b. To ensure a fair return to shareholders
c. To ensure maximum operational efficiency by efficient and effective utilization of finances.
The financial decisions can
rationally be made only when the business enterprise has certain well thought
out objectives. It is argued that the achievement of central goal of
maximisation of the owner’s economic welfare depends upon the adoption of two
criteria, viz., i) profit maximisation; and (ii) wealth maximisation. Tags : Financial Management - Finance – An Introduction
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