Question

The nature of Financial Management is

• A. Is a part of business management
• B. Is not a part of business management
• C. Is a function of administration
• D. None of these

Hint:

Think of business management as the human body. Financial management is like the circulatory system – it's a distinct system, but it's essential for and connected to every other part of the body to keep it functioning.

Answer 1

The Correct Option is A

Step 1: Understanding the Question:
The question asks to define the nature of Financial Management and its relationship with other business functions.
Step 2: Key Concept:
Business Management is a broad field that encompasses all the activities required to run a business, such as planning, organizing, directing, and controlling. It includes various functional areas.
Step 3: Detailed Explanation:
- Business management is comprised of several functional areas, including Production Management, Marketing Management, Human Resource Management, and Financial Management.
- Financial Management is the specialized function that deals with the procurement and effective utilization of funds to achieve business objectives.
- It is an integral and inseparable part of overall business management. Every decision in a business has financial implications, and therefore, financial management is intertwined with all other areas of management.
- For example, a marketing decision to launch a new ad campaign requires financial resources, and a production decision to buy new machinery involves a capital budgeting decision.
- Therefore, financial management is a core part of business management, not something separate from it or merely a function of administration (which is a more general term).
Step 4: Final Answer
Financial Management is an essential and integral functional area of overall Business Management.