THEVALUEOFFINANCIAL MANAGEMENTINBUSINESS

Financial independence is one of the fundamental goals of any enterprise. However, to achieve financial independence, company owners must comprehend the possible consequences of their management decisions on numerous financial factors such as profitability, cash flows, financial risks, and so on. According to Matthew p Schulman, the success of each of the numerous financial decisions made by business owners and executives has a direct impact on the overall financial performance of firms. The first stage of most businesses is characterized by financial losses and negative cash flows.

This makes it even more critical for startups to have a clear financial management strategy in place to guarantee that there is enough cash on hand to pay staff and suppliers, even when cash outflow exceeds cash inflow. This also implies that business owners must establish precise financial predictions that account for such negative cash flows, allowing them to be ready with backup funds until the firm becomes profitable.