Estimating capital requirement: Financial Management makes the estimation of both short term & long term financial needs to make the smooth running of a business.

• Short Term Financial Needs: Refers to the financial requirement for a period within one year or financially required to meet day to day expenses. 
• Long Term Financial Needs: Refers to the financial requirements for a period exceeding one year.

Capital budgeting: It refers to the long term funds. Capital can be raised in two ways either debts or Equity. Capital budgeting decides the composition of debt & equity in the long term finance of an organization.

Working capital marketing: Excess of current assets over current liabilities represents the working capital of an organization. To ensure the smooth working of an organization it should have sufficient working capital to meet the day to day needs.

Appraisal of financial performance & financial control: Financial Management provides various financial tools such as Ration analysis, Budgeting, Variance analysis. It helps the management to control the financial activities of the organization.

Making financial decisions: Financial Management is concerned with financial decisions relates to the composition of assets. Capital & Investment. Sound financial decisions are made depending on risk & return.

Solution to financial problem: A good financial management helps the top management by providing financial information and also solutions to various financial problems.

Communication of financial performance: It is used to measure profitability & liquidity of the business. The various stakeholders who are keen about the financial performance of the organization are Shareholders, Creditors, Investors, Economists, Employees and Government.