Financial management

Financial management addresses how resources are raised, invested, controlled and returned to finance providers. It links long-term investment choices with capital structure, working capital, liquidity and financial risk. In a shareholder-owned business, value creation is a central financial objective, subject to legal, ethical and stakeholder considerations. Other organisations may pursue service or public-benefit objectives with financial sustainability constraints. The role is different from preparing financial statements or producing management cost information, though those activities provide essential evidence. Good decisions seek an appropriate risk-return balance, rather than blindly minimising every risk.