Goals of Financial Management in Business
It is one thing to have finances or assets but it is another thing to manage them adequately. Poor financial management could lead to an eventual loss of assets whether digital or non-digital. Oftentimes in the cryptocurrency space, we here people say they were liquidated or they are in loss. Inasmuch as those things are part of the things one should expect in the cryptocurrency space, it is grossly attributed to poor financial management.
You need to know when to buy and when to sell; you shouldn't FOMO. You need to know the coins to hodl and they ones to sell off immediately you are in reasonable profits. Do not just invest in any cryptocurrency, get to know their roadmap, utilities and team before investing. Some cryptocurrency projects will not last till the next five because they have a poor development and marketing team.
So, what are the goals of financial management in a firm or business?
Maximization of Profit
If you are not making profits in your business then you are not managing your finances well. They are no two ways about it. The number one goal of financial management is profit maximization. Profit maximization which means maximizing the earning of a firm or an individual's earning may be viewed as the most important goal for financial management. Under this criterion, each decision would be evaluated on the basis of it's overall contribution to the firm's earnings. While this may appear to be a desirable approach, there are some serious drawbacks to profit maximization as the primary goal of a firm.
Firstly is that it does not take into consideration the timing or duration of the expected returns. Secondly, the key variable, profit, may not be accurately measured. There are many different economic and accounting definitions of profit, each open to its own set of interpretations. Thirdly, it does not consider the risk of the prospective earnings streams.
However, what the drawbacks, as a financial manager, you core duty is to make profits else you have failed in that role. Employ the right strategies and adopt profitable investment plans.
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Well, this was right into your face saying, but it is like that... People can make a couple of wrong investments, but not all the time... It means that you have change something and you do it wrong...
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That's why it is necessary to do your research very well before choosing to invest.
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