Basic Concepts In Strategic Financial Management

The modern conception of economy bases the conceptualism of finances on judgment, logic and practicability, which leads to the increasing of the benefit and to the importance of the organization. Finances are represented by the financial resources of the organization that performs its functions. In order to provide the products and services useful to the society, both the public and the private domain are needed. The private domain has a competitive economy with products and services made from private capital. The public domain has a forecasted, concentrated economy, the products and services being made from public funds. Public finances are made up of resources, expenses, loans and public debts associated with the state, the public and administrative-territorial authorities, and are materialized in the public budget. Private finances are made up of resources, expenses, loans, receivables and payment obligations of private organizations. Banks and other financial institutions that attract capital form the financial market. Financial management provides the institution with the resources it needs. Financial management can be defined as the science that studies the processes of leading, predicting, organizing, training and controlling the financial capital available in the organization in order to achieve the proposed objectives. The organization is a system, a set of sides that interact, perform processes or solve tasks in order to achieve the proposed objectives. This is made of inputs, processes, outputs and control or feedback.