Tuesday, May 31, 2011

FINANCIAL MANAGEMENT A SCIENCE OR AN ART?

How would you view Financial Management as a science or an Art?
Financial management is akin to Applied Science in the sense that is based on a number of systematic principles, policies and guidelines
. These guidelines are being continuously reviewed in the light of requirement of applied business situations. While a number of guidelines are permanent in nature, there are certain areas where changes have been and are done from time to time. In Financial Management we see the ample use of computers, mathematical models, different quantitative approaches and statistical techniques also. Thus characteristics of Science are largely present in the application of Financial Management.

However, more knowledge of those systematic principles, policies and guidelines coupled with being conversant with application of computer. Mathematical and statistical techniques will not enable to take decision in financing management. A good financial or investment decision is based on opinion, judgment, sense or feeling. There is no cut and dried rule in a number of financial decisions. They are more based on intuition and sense of application is case-to-case basis. Thus it is the art of application that plays a major role in Financial Management.

The basic knowledge is necessary for grasping the subject of Fin Mgmt, they are to be supplemented by a power of judgment, sense of taking decision and intuition including the ability to foresee the implication of a financial decision. Thus Financial Management is both a science and Art.

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