The Role of Financial Management and Business Uncertainty (eBook)

Seminar paper from the year 2022 in the subject Economics - Finance, grade: 10, , language: English, abstract: Financial management plays one of the most important roles in running a successful business. It is necessary to minimise costs, maximise profits and plan or manage the financial resources of the company. In times of crisis, financial management skills are even more important. Economic uncertainty can have significant negative consequences for businesses. Economic uncertainty has been found to significantly reduce the performance of companies. Economic uncertainty worldwide has reached record levels in recent years.

I will describe the impact of economic uncertainty on companies and the financial management function. I have found that an adverse shock to economic uncertainty has a negative effect on real GDP. If we want the economy to perform well, we need to monitor economic uncertainty and respond appropriately. Management must incorporate stress-testing procedures, investments, business strategies and economic forecasts into their decision-making processes if they want to see stable and profitable business operations.