Agency problem

It is the conflict of interests between the principal and the agent. In financial management agency problem refers to the conflict of interest between the shareholders and managers who can appropriately be viewed as the prinicipals and agents rspectively. There is agency problem also between shareholders(through managers)as agents and creditors as principals in agency problem in a firm in 1976.
Agency problem between the shareholders and managers
Mechanism to resolve the conflict of interests between shareholders and managers
Agency problem between stockholders and creditors
Mechanism to resolve the conflict of interest between share holders and creditors

Goals of financial management

Objectives of the firm or corporation refer to the purpose for which the finance functions are carried on.The objectives provide criteria for financial decisions making. It is very much essential to have right goals for right financial decisions.Objectives provide guidelines for financial decisions and functions. hence , these objectives are also called as goal of the financial management or financial goal.so setting appropriate objectives is very much important for the sucessful operation of the firm. There are mainly two widely discussed objectives of a firm. They are as follows:
- Profit maximization
- Shareholders wealth maximization

Relationship with other functional areas

It is one of the functional areas in a business organization. There are other functional areas like production, marketing and human resource.The financial manager's work do not confine in the finance department, s/he work on coordintaion with other functional managers in the organization. It is because decisions taken in any area have financial implications. The controller can complete the budgeting and profit planning with the help of all other departments.Controller works in close coordination with sales department while preparing sales budget and selling and distribution overhead budget. The controller prepares productionn budget,laborbudget,and factory overhead budget in coordination with production department. The relationship of financial management management with other functional areas is discussed below:
Marketing management
Production management
Human resource management

The financial manager's responsibilities

The term ' financial manager' is used to referto vice-president finance , treasurer, controller and other managers working under them. Financial jobs of an organization are divided among the financial managers according to the need and organizational stucture of the firm. Basically, financial managers involve in investment decision, financing decision and dividend decision so as to maximize the value of the firm.The specific responsibilities of a financial manager can be given as below:
Planning and controlling
Investment decision, financing and dividend decision
Dealing with financial markets
Risk management

Routine finance functions

Routine finance functions are performed to the effective execution of executive finance functions.Some of the routine finance functions are as follows:

Supervision of cash receipts and disbursements
Safegaurding of cash balances
Custody and safegaurding of valuable documents like securities and ansurance policies.
Taking care of mechanical details of financing
Record keeping of the financial performance of the firm
Reporting to the top management
Supervision of fixed assts and currents assets

Executive finance functions

They are those functions that require managerial skills their planning , execution and control. Since these functions require greater managerial ability, they are also known as managerial finance functions. The executive finance functions can be explained as below:
Long term investment decision
Financing decision
-Deciding upon tneeds and sources of financing
-Carrying on negotiation for new outside financing
Dividend decisionWorking capital decision