Financial Tools – Financial LiteracyFinancial tools can only be understood when entrepreneurs are financially literate. By understanding the five important elements of finance, an entrepreneur can achieve success, which can only be achieved through financial knowledge. Say no to plagiarism. Get a tailor-made essay on “Why Violent Video Games Should Not Be Banned”? Get an original essay Understanding the fundamentals of financial tools that enable businesses to operate successfully helps entrepreneurs not only formulate their overall strategy and balance long-term investments with quarterly budgeting decisions, but also stay on top of the smallest details like customers who haven't paid, suppliers who overcharged, or once-black numbers starting to slip into the red. Talk to private equity firms, banks or investors – all of whom could become stakeholders in a growing business – the ability to be able to talk (financially speaking) will undoubtedly prove invaluable. All entrepreneurs need adequate financing to launch and then grow their business. Access to loans or lines of credit is a key factor in the process of small business expansion. A business owner with financial knowledge is more likely to have complete control of their business. Understanding what balance sheets and profit and loss statements mean provides a clear view of your company's financial situation and subsequently facilitates smarter business decisions. As a small business owner, you don't have to manage every financial aspect, but gaining some financial acumen means you'll be able to manage some of the company's finances and, in doing so, to give you the best chance. to build a business that can thrive. As noted above, tracking business spending results helps one or more entrepreneurs make better decisions in the future. Such that any profitable business attracts more funding while unprofitable businesses are abandoned in order to keep the business afloat. Financial literacy also involves the study and analysis of data and results. For example, if a business pays for marketing or advertising, it should be able to track the amount of sales made through that channel. This way, business owners can know if it is money well spent in case of profit or money. poorly spent in case of loss. When expenses are well thought out in this way from the start-up phase, it gives a certain stability to the company and discourages playing to the gallery. Historically and until today, money has always been a major problem for start-ups. So, for founders who have taken caution as their watchword, doing business becomes a little easier and less difficult. For every start-up business, every rupee spent by the business should be spent on the best option available to influence the growth of the business. Financial ignorance carries significant costs. Entrepreneurs who do not understand the concept of interest capitalization spend more on transaction fees, accumulate larger debts, and incur higher interest rates on loans. They also end up borrowing more and saving less money. At the same time, the potential benefits of financial literacy are multiple. Financially savvy investors are more likely todiversify risks by spreading their funds between several companies. Without an understanding of basic financial concepts, people are not well equipped to make decisions related to financial management. Financially literate people have the ability to make informed financial choices about saving, investing, borrowing, and more. So here are some reasons why financial literacy is an important aspect of entrepreneurship. Financial literacy allows entrepreneurs to take responsibility for every rupee, and to stay focused on costs and simple cash flow metrics, all of which are essential in maximizing a small business' chances of survival. Throughout their professional journey, entrepreneurs are faced with complex decisions. It is therefore believed that equipping them with financial skills would contribute to a better understanding of financing options and the availability of financial support services. Every year, thousands of entrepreneurs start and build small businesses. The real challenge for these entrepreneurs is to then gain momentum. All small businesses must grow profitably to succeed. The ability to grow a business profitably and sustainably requires financial knowledge. In contrast, in major emerging economies – the BRICS (Brazil, Russian Federation, India, China and South Africa) – on average, 28 percent of adults are financially literate. Disparities also exist between these countries, with rates ranging from 24 percent in India to 42 percent in South Africa. Financial literacy rates differ wildly between the world's major advanced and emerging economies. On average, 55% of adults in major advanced economies – Canada, France, Germany, Italy, Japan, the United Kingdom and the United States – are financially literate (Figure 1). But even between these countries, financial literacy rates vary widely, from 37 percent in Italy to 68 percent in Canada. Financial literacy rates differ significantly across characteristics such as gender, education level, income and age. Worldwide, 35 percent of men are financially literate, compared to 30 percent of women. Women have lower financial skills than men, even accounting for differences in age, country, education and income. There are also gaps in financial knowledge when looking at relative income. They are less willing to take crucial steps like saving for retirement, buying a home, or thriving after divorce. Without access to basic information, it's difficult to be an equal partner within a relationship or effectively manage your own financial details. Additionally, many victims of the financial literacy gender gap may feel ashamed of not having an education. As a result, they may be reluctant to seek help or educational resources. Studies show that, on average, women have less financial knowledge than men. A wide range of factors contribute to this disparity. It is a combination of awareness, knowledge, skills, attitude and behavior necessary to make sound financial decisions and ultimately achieve individual financial well-being (Organization for Cooperation and Development economic development). Another definition from the President's Advisory Council on Financial Literacy, financial literacy is the ability to use knowledge and skills to manage financial resources effectively throughout the lifespan.life (Pailella, 2016). Financial literacy is the ability to collect important information, as well as differentiate between various financial options, discuss financial issues, plan and respond competently that affect financial decision making. Economic questions related to understanding economic problems in a country or in the world. Financial services related to knowledge of the current product and service. Investment linked to knowledge of investment and investment risk. Gender, age, education level, marital status, family income, financial decision-making process, budgeting and spending are influencing factors on financial literacy. So, a woman entrepreneur is one who starts a business and runs it independently and tactfully, and takes all the risks. , faces challenges with audacity and an iron will to succeed. Women's entrepreneurship is an economic activity of women who think of a business, start it, organize and combine production factors, operate the business, take risks and manage the economic uncertainty of running a business. Women's entrepreneurship means that the entire process of organizing factors of production, finance and human resources management is carried out by women. No one can define female entrepreneurship, but it can be differentiated based on gender. Entrepreneurship is an economic activity undertaken by an individual or a group of individuals. Entrepreneurship can be defined as the creation of a “new combination” of already existing materials and forces; that entrepreneurship presents itself as innovations, as opposed to inventions, and that no one is an entrepreneur forever, only when he or she actually carries out the innovative activity. Conceptual Framework for Women's Entrepreneurship Cash Management When looking at cash flow management has three main breakdowns that show where cash comes from and goes: Financing activities include borrowing and paying off long-term liabilities . Investing activities include buying and selling your long-term fixed assets, such as property, plant and equipment. Operating activities include your day-to-day operations. Increases and decreases in receivables and payables are recorded on your cash flow statement, just like other activities related to operating your business and selling your products and services. The operational section is where your main cash flow should be generated. The long-term health of a business depends on good net income and positive cash flow from your operating activities. Budgeting Basics Budgeting is the most effective way to control your cash flow, allowing you to invest in new opportunities when the time is right. A budget is a plan to: Make sure you have enough money for your future projects. provide only sound financial products and services, but consider all the ways we can increase the wealth and well-being of our members. Financial literacy is one of the first steps on the path to economic strength and independence. We have developed a number of initiatives and continue to work with community partners to deliver programs to individuals, businesses and organizations. The Impact of Interest Understanding the ins and outs of interest can impact your finances more than you probably realize, so it's an important concept to acquire »,, 16(2), 87-100