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  Methods and Tools of Financial Management

Methods and Tools of Financial Management:

Methods and tools of financial management are required for financing, investment. Here we are given vital methods and tools of financial management:

1. Tools of Financial Management for Financing:

A) Financial Leverage:

In this tool, finance manager fixes his requirement of financing. Over and low financing estimation might be harmful for corporation. Optimum loan necessity is fixed with financial leverage tool.

B) Selecting best source of finance:

In this tool, finance manager examine various source of financing. He checks their rates, repayment terms and other situation and then selects best option.

2. Tools of Financial Management for Investing Decision:

Such tools are employed to know which best option of investment is. Will this alternative provide us best return at minimum risk: internal rate of return, capital budgeting, net present value? In the region of investment in current assets, we utilize working capital management for knowing best investment in present assets.

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