Financial management can be defined as tasks and responsibilities of financial manager. Main duties of financial management including decisions about investment, business activities financing and distribution of dividends of a company, thus, task for financial manager is plan for maximize the value of the company.

Another important activity that must be done by financial manager is concerning about four aspects, which are: the financial manager should work with other managers that in charge of company’s general plan. And the financial manager must focus on various investment and financing decisions, and all things that related to it.

Basically, the purpose of financial management is maximizing corporate value. However, behind this goal there is still a conflict between business owner and financial supplier as a creditor. If the company goes well, then the value of shares will increase, while the value of corporate debt in form of obligations is not affected at all.

So it can be concluded that the value of the stock ownership could be an appropriate index to measure the level of the company effectiveness.

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The results are the basis for analyzing whether the stocks that contained in the company’s stock portfolio are worth to be invested in. Investment that made by the company is very material and greatly contributed to the company’s profits so that the investment should be maintained and improved.

The company can choose more risky investment instrument because with a good management then the company also can obtained greater return. In addition, companies also need to review the preparation methods of existing portfolio, so that despite of decline JCI that describes unhealthy conditions of the market, basic value of securities market that owned by the company can continue to be maintained and even enhanced.

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