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Introduction

Strategic financial management involves managing a company's finances to achieve its goals through a combination of financial tools and techniques. It offers both financial benefits, such as profitability and liquidity management, and non-financial benefits, including improved decision-making and innovation. The process includes evaluating financial performance, forecasting, and aligning management's vision with the company's goals.

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9 views14 pages

Introduction

Strategic financial management involves managing a company's finances to achieve its goals through a combination of financial tools and techniques. It offers both financial benefits, such as profitability and liquidity management, and non-financial benefits, including improved decision-making and innovation. The process includes evaluating financial performance, forecasting, and aligning management's vision with the company's goals.

Uploaded by

xyzxyzz150
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

STRATEGIC FINANCIAL

MANAGEMENT
INTRODUCTION

• Strategic financial management is the process of managing the finances of a company to


meet the organisation's goals.
• It’s a management approach that uses financial tools and a mix of techniques to create a
strategic plan. It also ensures the strategy is implemented as planned and is achievable in
the long term.
BENEFITS OF STRATEGIC FINANCIAL
MANAGEMENT

• Financial Benefits
• Non-financial benefits
FINANCIAL BENEFITS INCLUDE:

• Profitability management
• Solvency planning
• Liquidity management
• Understanding of competitive landscape
NON-FINANCIAL BENEFITS INCLUDE:

• More efficient decision-making


• Aligning company-wide goals
• Common frameworks
• Innovation and technology adaptation
IMPORTANT FACTORS TAKEN INTO
CONSIDERATION
• Key performance indicators (KPIs)
• Timelines
• Team involvement
• Plans
FINANCIAL STRATEGY

• Financial strategy of an organisation is essentially concerned with


procurement and utilization of funds.
• Financial strategy deals with areas such as financial resources, analysis of
cost structure, estimating profit potential, accounting functions and so on.
4 BROAD AREAS OF FINANCIAL STRATEGY

• Evaluating Financial Performance

• Financial Forecasting
• Capital Structure Planning
• Other Financial Considerations
COMPONENTS OF A FINANCIAL STRATEGY

• Financing Decision
• Investment Decisions
• Dividend Decisions
• Working Capital Management
• Cash Flow Management
• Managing Growth and Risks
STRATEGIC FINANCIAL PLANNING PROCESS

• Scanning the External Environment


• Internal Introspection
• Clear and Compelling Goals
• Management’s Vision Aligned with the Company’s Vision
CHARACTERISTICS OF STRATEGIC FINANCIAL
PLAN
• It relates to long-term management of funds.
• It focuses on profitability & wealth maximization
• It is result oriented convergence of resources, especially financial & economic resources.
• It promotes growth, profitability &sustainability of the organization
• It applies contemporary & traditional financial evaluation.
CHARACTERISTICS OF STRATEGIC FINANCIAL
PLAN
• It incorporates an innovative, creative, multi-dimensional & lateral thinking oriented
approach.
• It is structured as well as flexible in nature.
• It is consider costs on a strategic basis.
• It is an amalgamation of analytical financial techniques along with qualitative &
quantitative judgments
IMPORTANCE

• Proactive planning forecasting funding needs.


• Optimal utilization of resource
• Strategic investment plans
• Liquidity maintenance
• Stakeholder interest
• Perspective beyond working capital requirements
IMPORTANCE

• Perspective beyond working capital requirements


• It creates to short term fund needs.
• Encourages consistency in profitability

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