Emphasis on Cashflow and Financial Forecasting:

The financial managers primary emphasis on cash flow, the intake and outgo of cash

Regardless of its profit and loss of a firm must have a sufficient flow of cash to meet its obligation as
they come due.

The financial manager by concentrating on cash flows should be able to avoid insolvency and
achieve the firms financial goals.
Where as accountants devote most of their attention to the collection and presentation of financial
data, financial managers evaluate the accounting statements develop additional data and make
decision based on the assessment of the associated return and risk.

Key activities of Financial Managers:

Performing financial analysis and planning making investment decisions and financial decisions.
Although investment and financial decisions can be conveniently viewed in terms of balance sheet,
these decisions are made on the basis of their cash flow effects.

Monitoring the firms financial condition evaluating the need for increased productive capacity and
determining what financing is required.

Although this activity relies heavily on accrual based financial statements its underlying objective is
to assess the firms cash flow.
Investment decisions determine both the mix and the type of asset found on the Left hand side of
the firms balance sheet. Mix refers to the number of dollars of current and fixed asset.

Once the mix is established the financial manager attempts to maintain optimal levels.
The two long term financing choice are debt and equity capital.

Many of these decisions are dictated by necessity but some require in depth analysis of financing
alternatives their costs and their long run implications.