What encompasses the term "financial management"?

The term "financial management" broadly refers to the process of planning, organizing, directing, and controlling the financial activities of an organization. This includes various elements such as budgeting, forecasting, and financial reporting, as well as overseeing investments and managing risks. By emphasizing both planning and controlling financial activities, this definition encapsulates the comprehensive nature of financial management, which aims to maximize an organization’s financial performance and achieve its financial objectives.

In contrast, focusing solely on budgeting activities limits the scope of financial management, as it is only one component of a larger framework. While investment portfolio management is a vital aspect of finance, it is more specific and does not encompass the full range of financial activities managed within an organization. Similarly, staff salary allocations, while important for operational management, are just one specific area that would fall under the broader category of financial management, rather than defining it. Thus, option B accurately captures the essence of financial management in a holistic manner.