Why majority of Management students choose a career in Finance? – NDIM- New Delhi Institute of Management

Why majority of Management students choose a career in Finance?

If we talk about the financial management, then it refers to the efficient and effective management of money (funds) in a way to accomplish the objectives of the organisation. It is the most specialised function which directly connected with the top management.

Scope and element of Financial Management

  1. Financial management helps in making the decision related to finance from various resources such as source of finance, period of finance, cost of finance and the returns thereby.
  2. Dividend decision – It is the key responsibility of Finance manager to take the decision with regards to the net profit distribution. Net profits are divided into two forms:
    • Dividend for shareholders
    • Retained earnings

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Objectives of Financial Management

Talking about the objectives of the financial management than it is concerned with procurement, allocation and control of financial resources of a concern. The objectives can be-

Financial management can ensure regular and adequate supply of funds to the concern departments.

It also provides adequate returns to the shareholders which depend upon the earning capacity, the market price of the share and expectations of the shareholders.

It helps optimum funds utilisation. Once the funds are obtained than it has become important that it should be utilised in maximum possible way at least cost.

To safeguard investment, funds should be invested in profitable ventures so that fair rate of return can be achieved.

It helps in planning a sound capital structure- To maintain the balance between debt and equity capital, there should be sound and fair composition.

Functions of Financial Management

Choice of sources of funds: In the long run if company chose to grow it has to make arrangement of funds, which can be done by- -Issue of shares or debentures -Loans from banks and financial institutions -Public Deposits in the form of bonds. Choice of a factor will depend on relative merits and demerits of each source and period of financing.
  1. Investment of funds: It is the key responsibility of finance manager who has to decide to allocate the funds into profitable ventures to ensure the safety on investment and regular returns is possible.
  2. Disposal of surplus: All the decisions regarding net profits have to be made by the finance manager. This can be done in two ways:
    • Dividend declaration
    • Retained profits
  3. Management of cash: Making decisions regarding cash management is the key responsibility which is completely on the shoulders of Finance Manager. A company should have an adequate amount of cash to fulfil the need of an organisation.
  4. Financial controls: The finance manager has to exercise control over finances which can be done through many techniques like ratio analysis, financial forecasting, cost and profit control, etc.

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Employment Opportunities for the students of Financial Management

There are various factors and objectives which create the need and emergence of financial planners. It has also observed that nowadays for many business holders taking the right decision regarding financial management and investment gets more challenging and complicated.

Specially in India, Business owners are getting more curious to manage their finance efficiently to get the right amount of Return on Investment which results in an increase in demand for the Financial planners.

The need for these planners also encourages various factors which include an increase in company’s growth and generating employment opportunities. Even today progressive corporates have started to consider the sound knowledge of financial management among their employees as an add-on skill-set. In today’s time families / group of individuals also require and hence seek for financial planning to prepare for their future financial goals.