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History of Financial Management

The History of Financial Management. The practice of giving or exchanging goods (barter trade) in exchange for goods once held in the hands of civilization. In this article briefly discussed History of Financial Management.

History of Financial Management

Against the backdrop of the Industrial Revolution, the world of economics, trade and business underwent radical changes. As a result, financial management, as a subject of study in the 1890s, became a separate branch of business economics. It has become a popular topic in today’s world.

1890s-1910s (consolidation, preparation and analysis of financial statements):

1890s – 1910s saw major changes in the world’s business world. In the United States, about 4,300 companies merged to form only 300 companies. The consolidation process requires a huge amount of money. The process of collecting the necessary money from a simple medium and the necessary accounting process for it also appeared to be extensive and complex.

As a result, capital management, along with other functions of the organization, moved into a framework and the preparation and analysis of financial statements became urgent. Therefore, this period is called the period of consolidation, preparation of financial statements and beginning of analysis. Notable events of this decade are as follows.


The famous author Thomas L. Green publishes a book entitled “Corporation Finance” which reveals the origins and practices of traditional concepts of financial management. J, d. Rocky Feller combines with other companies in his group. The most popular merger took place.

in 1900s:

U.S. merges eight major U.S. steel companies Steel Corporation. The company invests 1.4 billion, equivalent to seven percent of the country’s gross national product. That’s the equivalent of 730 billion at current prices.

1900s-1910s (Investor’s Conservation):

The financial statements of the Joint Stock Co have been published in the current era since the publication of the financial statements. Many feel that it has been made compulsory.

1910s – 1923s:

This is the most evolving decade in the history of income management. More importance is won. And that is the current state of the American economy when it comes to debt financing. This is because the Industrial Revolution affected the trade, the currency system, the market system, the way of life and even the civilization of this decade.

In addition to increasing the mass production and profitability of industries, new industrial enterprises were formed and planning and control systems were introduced in the financial system. The result is an external financial system rather than an internal financial system. In this decade, Illinois C, W. Garstonbus published a book on financing. This decade is noteworthy.

1913s History of Financial Management:

Henry Ford’s industrial enterprises began the process of mass production and maximization of profits, and the fuel companies were seen to be turning into utilities companies.

1920s – 1930s (Advances in Technology):

The great discovery of technological excellence helped computers to transform this decade. Scott Besley and F. Brigham, well-known authors of the decade, say, “During the depression era of the 1930s.

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However, an unprecedented number of business failures caused the emphasis in managerial finance to shift to bankruptcy and re-organization, to corporate liquidity, and to regulate the securities markets. ” As a result of decision theory, it is possible to mourn the ‘rules of thumb’.

1930-1940s (Great Depression and Passage):

The Great Depression of the last decade took the form of Great Depression in this decade. Crisis in other countries, including the US stock market, has also led to a crisis and a sharp fall in the share prices of large companies.

Unemployment takes the form of an epidemic. This is considered to be the result of the Second World War. Financial management has served as a tool to overcome this situation. Notable events of this decade.

1932s History of Financial Management:

The share price of each of Draw Jones’s nearly 30 industries fell by 69 percent, and U.S. Steel Company’s share price fell from 261 to 21, and the unemployment rate in the United States rose from 3.2 percent to 5 percent. .

1940s – 1950s (emphasis on external finance) :

During the 1940s and early 1950s, finance continued to be taught as a descriptive, intstitutional subject, viewed more from the standpoint of an outsider than from that of management.

Managers focus on liquidity such as cash budgeting and short-term benevolence, and the scope of financial management has grown exponentially in this decade. As a result of the partition of the country.

in 1947s history of Financial Management:

The emergence of massive global currency market techniques, financial management in the Indian subcontinent also underwent major changes and expansion. Gains breadth. As a result, financing management from theoretical analysis to numerical method

The 1950s and 1960s (the development of numerical systems):

Computer devices as technology developed in this decade. It was in this decade that the journey of modern finance management began. As a result, trouTuilulur is getting the help of various techniques in decision making. What are the notable events of this decade?


In the international competition, the advancement of discovery and the technological environment, And perhaps most importantly,

such as inflation, government deficits, financial uncertainty and the spread of international evils. This is how the financial manager decides on financial matters and financial activities. Emerging pockets and ways to encourage and retain shareholders emerge. So this year was given the possibility? Barya is also called.


In this decade, the valuation process has improved tremendously and the scope of financial analysis has been included to cover

  • a. Inflation and what changes in business decisions as a result,
  • b. The result of the decentralization trend of financial institutions,
  • c. the dramatic increase in the use of computers in the exchange of analysis and mechanical data,
  • d. The importance of the global market and business activities and
  • e. Increase in the number of financial products available to investors.

2000s – Extension of the present modern age):

Financial management is also becoming more modern today according to other subjects by changing hands from the traditional age. From the New Millennium-

  • a. The Globalization of Business),
  • b. Information Technology and
  • c. Government Supervision

As a result, new words have appeared in the business world. Such as- Global, Digital market etc. On the back of human civilization, the economy has reached that easy stage today; Needless to say, financial management will one day be paramount.

Now may be clear this Question. What are the history, origins and evolutionary steps of financial management?