12 (b) 'Abhishek Engineering Ltd'., a leading manufacturer of steel rods wants to enter into the business of manufacturing trucks. For this, the Finance Manager has to ensure the availability of funds whenever required and its possible sources. He has to see that the company does not raise funds unnecessarily. In this way he has to match the funds requirement and their availability.

(i) Identify and give the meaning of the concept discussed in the above para which will help the Finance Manager to achieve his objectives.
(ii) Also, state any three points of importance of the concepts identified in (i) above.

Solution:

(i) Concept discussed in above para is Financial Management. 
Meaning of financial management: Financial management  refers to the efficient acquisition, allocation and usage of funds of the company. It deals in three main dimensions of financial decisions namely, Investment decisions, Financial decisions and Dividend decisions. Financial management helps in determination of total funds required.

(ii) Importance of Financial Management:
(a) The financial management helps in doing financial planning of any business by determining the financial requirements of the business concern.
(b) It helps in the acquisition of funds for the business concern ,and the fund which is required for running the business.
(c) Financial management helps to make sound financial decisions in business concerns. Financial decisions will affect the entire business operation.