This action might not be possible to undo. Are you sure you want to continue?
Financial managers oversee the preparation of financial reports, direct investment activities, and implement cash management strategies. Managers also develop strategies and implement the longterm goals of their organization. The duties of financial managers vary with their specific titles, which include controller, treasurer or finance officer, credit manager, cash manager, risk and insurance manager, and manager of international banking. Controllers direct the preparation of financial reports, such as income statements, balance sheets, and analyses of future earnings or expenses, that summarize and forecast the organization's financial position. Controllers also are in charge of preparing special reports required by regulatory authorities. Often, controllers oversee the accounting, audit, and budget departments. Treasurers and
finance officers direct their organization's budgets to meet its financial goals. They oversee the
investment of funds, manage associated risks, supervise cash management activities, execute capitalraising strategies to support the firm's expansion, and deal with mergers and acquisitions. Credit
managers oversee the firm's issuance of credit, establishing credit-rating criteria, determining credit
ceilings, and monitoring the collections of past-due accounts.
Cash managers monitor and control the flow of cash receipts and disbursements to meet the business
and investment needs of their firm. For example, cash flow projections are needed to determine whether loans must be obtained to meet cash requirements or whether surplus cash can be invested. Risk and
insurance managers oversee programs to minimize risks and losses that might arise from financial
transactions and business operations. Insurance managers decide how best to limit a company’s losses by obtaining insurance against risks such as the need to make disability payments for an employee who gets hurt on the job or costs imposed by a lawsuit against the company. Risk managers control financial risk by using hedging and other techniques to limit a company’s exposure to currency or commodity price changes. Managers specializing in international finance develop financial and accounting systems for the banking transactions of multinational organizations. Risk managers are also responsible for calculating and limiting potential operations risk. Operations risk includes a wide range of risks, such as a rogue employee damaging the company’s finances or a hurricane damaging an important factory. (Chief financial officers and other executives are included with top executives elsewhere in the Handbook.) Financial institutions—such as commercial banks, savings and loan associations, credit unions, and mortgage and finance companies—employ additional financial managers who oversee various functions, such as lending, trusts, mortgages, and investments, or programs, including sales, operations, or
Branch managers of financial institutions administer and manage all of the functions of a branch office. government financial managers must be experts on the government appropriations and budgeting processes. authorize loans.electronic financial services. is changing in response to technological advances that have significantly reduced the amount of time it takes to produce financial reports. These managers may solicit business. some small firms contract out all their accounting and financial functions to companies that provide such services. and. Working in comfortable offices. They often work on teams. as a consequence. it is important that they have substantial knowledge about the types of products that the bank sells. specialized knowledge to reduce risks and maximize profit. For example. establishing a rapport with the community to attract business. and direct the investment of funds. Job duties may include hiring personnel. Work environment. financial managers perform tasks unique to their organization or industry. always adhering to Federal and State laws and regulations. Financial managers increasingly are hired on a temporary basis to advise senior managers on these and other matters. acting as business advisors to top management. Financial managers play an important role in mergers and consolidations and in global expansion and related financing. financial managers now perform more data analysis that allows them to offer senior managers profitmaximizing ideas. The role of the financial manager. Moreover. whereas healthcare financial managers must be knowledgeable about issues surrounding healthcare financing. In fact. Technological improvements have made it easier to produce financial reports. As a result. and assisting customers with account problems. In addition to the preceding duties. financial managers must be aware of special tax laws and regulations that affect their industry. These areas require extensive. financial managers typically have direct access to state-of-the-art computer systems and information servi Financial Management . often close to top managers and with departments that develop the financial data those managers need. Financial managers who work for financial institutions must keep abreast of the rapidly growing array of financial services and products. particularly in business. approving loans and lines of credit. Branch mangaers also are becoming more oriented toward sales and marketing.
period of financing. . Objective Financial Management means planning. 3. Financial Management Meaning. It means applying general management principles to financial resources of the enterprise. b. allocation and control of financial resources of a concern. 2. To ensure regular and adequate supply of funds to the concern.They relate to the raising of finance from various resources which will depend upon decision on type of source. Dividend for shareholders. Retained profits. Objectives of Financial Management The financial management is generally concerned with procurement.The finance manager has to take decision with regards to the net profit distribution. Dividend decision . To ensure adequate returns to the shareholders which will depend upon the earning capacity. Net profits are generally divided into two: a. The objectives can be1. Investment in current assets are also a part of investment decisions called as working capital decisions. Financial decisions . 2. organizing. directing and controlling the financial activities such as procurement and utilization of funds of the enterprise.Dividend and the rate of it has to be decided.Amount of retained profits has to be finalized which will depend upon expansion and diversification plans of the enterprise. Scope/Elements 1. cost of financing and the returns thereby. Investment decisions includes investment in fixed assets (called as capital budgeting).
4. expectations of the shareholders. This involves short. Public deposits to be drawn like in form of bonds. the capital structure have to be decided. Choice of factor will depend on relative merits and demerits of each source and period of financing. Functions of Financial Management 1. Once the funds are procured. 4. 5.term and long. Loans to be taken from banks and financial institutions c. 3. Estimation of capital requirements: A finance manager has to make estimation with regards to capital requirements of the company.market price of the share. Determination of capital composition: Once the estimation have been made.term debt equity analysis. Issue of shares and debentures b. they should be utilized in maximum possible way at least cost. Estimations have to be made in an adequate manner which increases earning capacity of enterprise. a company has many choices likea. Choice of sources of funds: For additional funds to be procured.e. i. 3. To plan a sound capital structure-There should be sound and fair composition of capital so that a balance is maintained between debt and equity capital. 2. To ensure safety on investment. This will depend upon the proportion of equity capital a company is possessing and additional funds which have to be raised from outside parties. This will depend upon expected costs and profits and future programmes and policies of a concern. Investment of funds: The finance manager has to decide to allocate funds into profitable ventures so that there is safety on investment . funds should be invested in safe ventures so that adequate rate of return can be achieved. To ensure optimum funds utilization.
of the purse-strings. the finance manager. payment to creditors. purchase of raw materials. cost and profit control. Role of the finance manager in maximizing shareholder value: In many ways the finance manager must become the strategic partner of the chief executive officer. diversification plans of the company. Cash is required for many purposes like payment of wages and salaries. etc. Retained profits . Financial controls: The finance manager has not only to plan. this job has also included detailing and implementing a corporation's long-range goals as well as those in the short term. maintainance of enough stock. payment of electricity and water bills. b. Almost every firm of any size has a person whose role is "to create value from the firm's capital budgeting. but also for the future of the corporation. procure and utilize the funds but he also has to exercise control over finances. innovational. meeting current liabilities.and regular returns is possible. 7. execute cash management strategies. in this way.It includes identifying the rate of dividends and other benefits like bonus. Management of cash: Finance manager has to make decisions with regards to cash management. and net working-capital activities. 6. Increasingly. more than others.The volume has to be decided which will depend upon expansional. financial forecasting. Disposal of surplus: The net profits decision have to be made by the finance manager. The financial manager must also demonstrate leadership in cost-effective uses of the corporation's financial resources by utilizing effective financial management practices. Dividend declaration . This can be done in two ways: a. most certainly. Role of f manager The financial manager is an important position within the structure of any firm. and direct a corporation's investment activities. . This can be done through many techniques like ratio analysis. 5. Financial managers oversee the preparation of financial reports. etc. The finance manager is responsible. financing. is responsible for maximizing the shareholder value.
This action might not be possible to undo. Are you sure you want to continue?
We've moved you to where you read on your other device.
Get the full title to continue listening from where you left off, or restart the preview.