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Discuss the Role of Financial Management.

Role of a Financial Manager

Role of a Financial Manager There are certain functions of financial management that are different from other departments. This is precise office work.

Question: Discuss the functions of financial management. Discuss the role of financial management. Or, discuss the functions and responsibilities of a financial manager. Or, explain the functions of financial management in a modern large business organization. Or, review the financial functions that help an organization achieve liquidity and profitability. Or, consider the role of financial manager in business. Or, discuss business financing functions. Or, what are the specific functions that a financial manager is involved in?

All Questions to answer in this article, lets see

Role of Financial Management.

“Financial managers make decisions regarding which assets their firms should acquire, how those assets should be financed and how to manage their firm’s existing resources,” said Scott Besley and Eugene F. Brigharm.

1. Forecasting and Planning:

Financial Manager must continue to share opinions with other executives as they play a role in planning as well as targeting for the future position of the organization.

2. Important of Investment and Financing:

Important Investment and Financing Decisions? Sales of a successful firm usually continue to grow. Of course, it needs to invest in factories, machinery and stocks. The financial manager contributes to determining the desired sales growth rate and decides which of the options to acquire an asset should be adopted and decides the best way to raise the funds needed to acquire the asset.

For example, should a firm be financed by borrowing or selling stock? Should loans be short-term or long-term if chosen as a medium? The financial manager is responsible for such crucial decisions.

3. Self-regulation and control:

It is managed by a single person as much as possible. And to ensure this, the financial manager must build relationships with the mother of other employees. The financial quality of all business decisions is high and all managers are accountable for finances or others. Is to continue.

For example, marketing decisions have an impact on bill growth, which also affects investment growth. When a decision is made, a barrister considers various justifications in his decision. Such as palm activities or sponsors of activities, availability of funds, stock management policies and plant (factory). Usage wounds.

Financial Market Management (Dealing with the Financial Merkets):

Financial Manager Finance and Capital. The market operates properly. Since this firm is influenced by the general financial market and less affected. Where funds are intelligent, securities are lent, and an investor’s appropriate reward or. Punishment is given.

A financial manager has to manage 4 specific types of activities and he is directly responsible for them. If the above 4 types of work are performed efficiently, the financial manager is considered to have helped to maximize the value of the firm and ensure long term maximum welfare for those who are the buyers of the firm or those employees and other beneficiaries where the firm is located.

Discussion of daily activities part of Role of Financial Management:

1. Asset Acquire Decision

Asset Acquire Decision The decision to buy or invest property is one of the most important tasks a financial manager has to make. No property will be purchased or invested in any alternative project. To solve this kind of question, the manager has to perform the following two functions?

i. Financial planning:

There is no substitute for a sound and timely financial plan for financial planning and investment decision making. It is important for the firm to determine how much money Mate needs for everything from product production to sales and after-sales service. If the flow of money is not controlled in time, there is an excess of money or a part of the crisis. Which is a threat to any firm. So one of the important tasks for a financial manager is to develop a mature financial plan. The financial manager also has to decide on the short-term or long-term investment and his income or return (ROI).

ii. Identifying the Sources and Selecting the Sources of Funds:

A list is prepared of the sources from which or from which places it is possible to raise the required funds. Which is identified as an alternative source. After identifying the sources, selecting the available sources or sources is a strategic task.

Sources may also include informal sources. Such as- mother, father, friend – friend or relative; In addition, institutional sources such as banks, insurance companies, lease companies and various financial institutions, etc.

2. Collecting Funds Decision:

It is not right to think that a financial manager has done his job by selecting Collecting Funds Decision and selecting alternative sources. This is because one of the tasks of a financial manager is to raise the necessary funds and ensure its proper use (fund).

3. Assets Using Decision:

An organization have different types of assets. Such as- permanent, moving and floating. Proper management of these assets is the job of the financial manager. Money and farm property are one of the sources. Policies that a financial manager; Following is the decision to use the resources as follows:

i. Protection of Fund:

Protection of Fund 4 It is not possible to say that the profit will come from the investment project that has been taken. So projects should always be an uncertain medium for future gain. In such a situation, a financial manager makes a decision on behalf of the organization by making a balanced adjustment between investment risk, uncertainty and income.

ii. Protection of Cash Fund and Financial Documents:

It is the job of the financial manager to introduce and oversee the necessary arrangements for the preservation of documents. Proper management of all assets is very important for maximizing wealth. Which the financial manager

iii. Managing Assets:

Managing Assets Increases the productivity of a firm and the assets

iv. Cash Control:

Expenditure Control (Cash Control) In the current information age of free trade internal control and Essential for work. Expenditure control or Cash Control is therefore a very secretive job. Holy product. If there is no bay control system, the product may be more than a single or competing organization. Which. The market share of the product will provide overpowering.

v. Distribution of Profit:

Distribution of Profit and how much margin or profit has been earned from the firm’s invested funds and how much of it will be saved, how much will be paid to the owners or shareholders. A very important decision. This decision also involves the liquidity decision. Dividend decision also depends on liquidity decision. For example, it is up to the financial manager to decide whether the firm will pay cash or stock dividends.

4. Other Functions:

Financial managers perform a variety of tasks. Wherever money is involved, it is the job of the financial manager. Money is the nerve of an organization. So its management is also very comprehensive and sensitive. A financial manager also performs the following responsibilities. E.g.,

i. Budgeting,

ii. Preparation of accounts and timely inspection,

iii. All tax decisions,

iv. Loans and Recovery,

v. Management of Banking Activities,

vi. Insurance decisions,

vii. Ensure management and welfare of employees and

viii. Pricing.

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