Read the following passage and answer the question.

Rajan is working to coordinate the operations of different departments, such as production and sales, using principles of financial management. He often brings together people from both departments, encouraging them to work within their allocated budgets. Through careful analysis, he links current decisions with their future outcomes, particularly in key areas like investment and financing. By connecting these two decisions, he is able to make informed choices. At the end of the year, Rajan evaluates the performance of various departments, assessing revenue generated and expenses incurred. While he understands that no business is entirely risk-free, he focuses on minimizing potential risks, thereby setting the foundation for a more secure future. His ability to stay less involved in day-to-day operations is also a positive aspect of his management style.

Which concept of financial management has been highlighted in the above case?

Financial planning

The correct answer is option 1- Financial planning.

The concept of financial management highlighted in the above case is Financial Planning. 

Rajan is coordinating the operations of different departments, setting budgets, evaluating performance, and linking present decisions with future outcomes. These actions are part of financial planning, which involves setting financial goals, creating budgets, analyzing future outcomes, and ensuring that resources are allocated effectively to achieve the company’s objectives. So, the correct answer is Financial Planning.