Financial management refers to the efficient and effective
management of money (funds) in such a manner as to accomplish the
objectives of the organization. It is the specialized function directly
associated with the top management. The significance of this function is
not seen in the 'Line' but also in the capacity of 'Staff' in overall
of a company. It has been defined differently by different experts in
the field.
The term typically applies to an organization or company's financial strategy, while
personal finance or
financial life management
refers to an individual's management strategy. It includes how to raise
the capital and how to allocate capital, i.e. capital budgeting. Not
only for long term budgeting, but also how to allocate the short term
resources like current liabilities. It also deals with the dividend
policies of the share holders.