FINANCIAL MANAGEMENT: TESTING, FUNCTION AND ITS GOALS

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awab very certainly of what he had done. Financial decision making which is the responsibility of a financial manager is divided into three, namely:

Investment decision: relating to the problem of choosing the desired investment from an organization on the opportunities available by choosing one or more alternative investments that have value in profit
Financing decision: related to the problem of choosing various forms of available funding sources to make an investment by choosing one or more alternative expenditures which gives the lowest cost
Dividend decision: relating to the problem of determining the percentage of profit to be paid as cash dividends to shareholders.

In the other opinion, the definition of financial management can be interpreted as a fund management that is related to the problem of allocating funds in various forms of investment effectively and fund-raising efforts in financing investment and spending efficiently.

Although the function of a financial manager in each company is not necessarily the same, but the main principle of a financial manager must be the same, namely planning, searching and utilizing in various ways to maximize the usefulness of the company's operations.

So that it can be concluded that, financial management has an interest in how to create and maintain the economic value of a company. As a result, all decision making must be focused on creating the welfare of its employees.

Objectives of Financial Management
The purpose of financial management has been seen in the valuation process carried out by the money market, the main objective of which is to maximize shareholder wealth.

According to experts, the objectives of financial management are to:

Maximizing profits: a financial manager does not guarantee profits in the long term due to business uncertainty but the company can get maximum profits even in the long term if the financial manager takes the right financial decisions and uses the company's finances well. Maintain cash flow: a company must have an appropriate cash flow to pay for the costs of daily company needs such as purchasing tray materials, paying employee salaries, renting, and so on. Good cash flow or cash flow will certainly increase the success of the company Prepare a capital structure: a financial manager must be able to decide the ratio between financing owned and borrowed finance to be balanced. Appropriate financial utilization: financial managers must be able to utilize finance optimally and companies must not invest in financial companies in projects that are not profitable for the company.

Maximizing wealth: so a financial manager tries to give maximum dividends to shareholders and strives to increase stock market value because stock market value is directly related to company performance
Improve efficiency: financial management tries to improve the efficiency of all company departments. Proper financial distribution in all aspects will improve the efficiency of the entire company
The survival of the company: the company must be able to survive in the competitive business world as it is today. A financial manager must be careful when making financial decisions because if one makes a decision, the company could go bankrupt or lose money Reducing operational risk: financial management also tries to reduce operational risks. There are many risks of uncertainty in the business, but a financial manager must be able to take the right steps in order to reduce this risk.
Reducing capital costs: financial managers must be able to plan capital structures in such a way that capital costs can be minimized

Then what is the function of financial management? The main function of a financial manager is to plan, find and be able to use funds in various ways to maximize the usability of the company's operations. Of course this requires knowledge of the money market and where capital will be obtained and how appropriate decisions in the financial sector must be made.

An explanation of the functions of financial management is as follows:

Financial planning or planning. This includes cash flow planning and company profit and loss
Budgeting or budgeting, which is planning revenue and budget allocations efficiently and maximizing funds owned by the company
Controlling or financial control. This is an evaluation and improvement of the company's financial and financial systems
Auditing or financial audit, namely conducting internal audits based on existing company finances so that they are in accordance with accounting standard rules and there are no deviations
Reporting or financial reporting that is providing reports on information about the company's financial condition and financial statement ratio analysis.

A financial manager has a very big responsibility, of course, for what he has done. Financial decision making which is the responsibility of a financial manager is divided into three, namely:

Investment decision: relating to the problem of choosing the desired investment from an organization on the opportunities available by choosing one or more alternative investments that have value in profit
Financing decision: related to the problem of choosing various forms of available funding sources to make an investment by choosing one or more alternative expenditures which gives the lowest cost
Dividend decision: relating to the problem of determining the percentage of profit to be paid as cash dividends to shareholders.

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