1. Liquidity – Liquidity is the degree to which assets can be bought or sold in the market at a price of its intrinsic value. Financial liquidity refers to how easily any assets can be converted into cash.

 Financial management helps managers to decide what amount of liquid resource will be needed at any particular point of time, and deciding what form of liquid resource is required.

2. Profit Maximization – The ability for company to achieve a maximum profit with low operating expenses. Financial management sets an objective for a level of profitability high enough to attract new capital to the business and to reassure creditors and employees among other stakeholders.
3. Efficiency–Efficiency is the ability to produce a product as the minimum amount of effort possible. Financial management tries to increase the efficiency of all the departments of the company.

 Proper distribution of finance to all the departments will certainly increase the efficiency of the entire company.

4. Growth – Growth is the most important objective of financial management. The company must grow in this competitive business world.

The financial manager must be very careful while making financial decisions. One wrong decision on the part of manager would make company sick, and it will close down.

5. Prepare capital structure – Financial management also prepares the capital structure of an organization. It decides the ratio between owned finance and borrowed finance.

It brings a proper balance between the different sources of capital. This balance plays an important role in liquidity, economy, flexibility, and stability of the business.

6. Proper utilization of Funds – Proper utilisation of funds is an important objective of financial management. The financial manager must make proper utilisation of finance in order to benefit the organization.

 He must use the finance profitable and not waste the finance of the company. He must not invest any finance of the company in any unprofitable projects. He must not block the company’s finance in inventories and must opt for the short credit period.

7. Generates Goodwill–Financial management must always try to generate goodwill for the company as it improves the image and reputation of the company.

 Goodwill helps company to survive in the short-term and also succeed in the long-term. It also helps the company to retain in bad situations.

8. Wealth management – Financial management plays an important role in wealth maximization (also known as shareholder’s value maximization). Wealth maximization means to earn maximum wealth for the shareholders.

So the financial manager must try to give maximum dividend to the shareholders. He also tries to increase the market value of the shares. The market value of the shares is directly proportional to the performance of the company.

Better the performance, higher is the market value of the shares and lower the performance, lower the market value of the shares.

9. Creating reserves – One of the objectives of financial management is to create reserves. The company must not distribute full of its profit to the shareholders and keep a part of its profit as reserves. Reserves can be used for future growth and expansion. It can also be used to face any uncertain situation in the future.
10. Estimate financial need – Proper estimation of financial need is very important objective of financial management. The financial manager plays an important role in estimating the total financial requirements of the company.

He must find out how much finance is required to start and run the company. He must find out the fixed capital and working capital requirements of the company.

 It is necessary that his estimations must be correct otherwise it will create a situation of shortage or surplus of finance.

Estimating the financial requirement is very difficult job.The finance manager must consider many factors, such as the type of technology used by company, number of employees employed, scale if operations, legal requirements etc.

11. Proper Mobilisation – Mobilisation of finance is an important objective of financial management. After deciding the financial need, the financial manager must estimate about the sources of finance.

He can collect finance from many sources such as shares, debentures, bank loans, etc. There must be a proper balance between owned finance and borrowed finance. The company must borrow at a low rate of interest.

12. Maintain cash flow – Maintaining proper cash flow is a short-term objective of financial management. The company should have a proper cash flow in order to pay day-to-day expenses such as purchase of raw materials, payment of rent, wages and salaries, electricity bills, etc.

 If the company has a good cash flow system it may not face difficulties and it can also take advantage of many opportunities such as getting cash discount on purchases, large-scale purchasing, giving credit to customers etc.

A healthy cash improves the chances of survival and success of the company.

13. Reduce Operating Risk – Financial management also tries to control operating risks of the company. There are many risks and uncertainties in a business.

The finance manager take several steps to reduce these risks. He must avoid taking project which involves high risks. He must also take proper insurance.

14. Financial discipline – Financial management also plays an important role in maintaining financial discipline within an organisation. Financial discipline means to invest finance only in productive areas. This will bring high returns to the company and also avoid wastage and misuse of finance.

 15.Proper coordination– Coordination is very important in any organisation. Financial management tries to maintain proper coordination between the finance department and other departments of the company.