Introduction to Financial Management

6 APPROACHES TO FINANCIAL MANAGEMENT

Financial management approach measures the scope of the financial management in various fields, which include the essential part of the finance. Financial management is not a revolutionary concept but an evolutionary. The definition and scope of financial management has been changed from one period to another period and applied various innovations. Theoretical points of view, financial management approach may be broadly divided into two major parts.

Traditional Approach

Traditional approach is the initial stage of financial management, which was followed, in the early part of during the year 1920 to 1950. This approach is based on the past experience and the traditionally accepted methods. Main part of the traditional approach is rising of funds for the business concern.

Traditional approach consists of the following important area:-

Arrangement of funds from lending body.

Arrangement of funds through various financial instruments.

Finding out the various sources of funds.