OBJECTIVES OF FINANCIAL MANAGEMENT

It is the duty of management to clarify the objectives of business so that the departmental objectives could be determined accordingly. Financial objectives of a firm provide a concrete framework within which optimum financial decisions can be made. The main objective of any firm should be to maximise the economic welfare of its shareholders. Accordingly, there are 2 approaches in this regard.

  1. Profit maximisation Approach.
  2. Wealth maximisation Approach.