Overview of Malaysian financial system

Define the financial management

• Financial management is the establishment of budgets, standard costs and actual cost of operations, processes, activities or products; and the analysis of variances, profitability, or the social use of funds.

• Financial management refers to the study and practice of money-related decisions within a firm. It involve with planning and controlling of financial resource.

• Financial management or management finance refers to the study and practice of cost benefit decisions within a firm.

• Financial management is the process of classifying, recording and summarizing business transaction in monetary units and interpreting the financial data of a business in order to assist stakeholder in making decisions.

Which one of the following is not the importance of financial management

• It helps the company to plan and control the financial resources in order to reduce production inefficiency.

• Financial management allows for better communication among department

• Financial management will guide the proper decision making such as investment of fixed assets, how to manage short term cash flow and etc.

• Financial management can provide a picture of financial position of a company or business.

Financial manager is a person who responsible for the firm's significant investment and financing decision. Some of the responsibilities of financial managers are;

• Classifying - they arrange and classify the accounting data from business documents.

• Forecasting and planning - they must coordinate the planning process by interacting with people form other department.

• Investment and financing decisions - they must help to determine the optimal sales growth rate, what specific assets to acquire and the best way to finance those assets.

• Summarizing - They summarized the accounting data in the form of financial statement for a particular period.

• Managing risk- they responsible for the firm overall risk management program including identifying the risk that should be hedged and hedging them in the most efficient manner

What are three major areas of decision function of financial management?

• Investment decision

• Human resource decision

• Financing decision

• Assets management decisions

There are few goals of the firm. The major or primary goal is to maximize the stockholder wealth. True or false?

• True

• Flase

Social responsibility is another goals of the firm. Social responsibility can be defined as...

• The concepts that business should actively concern with the welfare of their staff at large.

• The concepts that business should actively concern with the welfare of the customer at large.

• The concepts that business should actively concern with the welfare of society at large.

• The concepts that business should actively concern with the welfare of management team at large.