Role of Financial Manager

Posted By on September 15, 2014


Download PDF
Scope of Financial Management
Relationship of Finance to Economics and Accounting

The financial manager plays an important role in the functional areas of finance. The assignments of finance functions to the financial manager depend upon size of the business enterprise. The larger the business enterprise the greater degree of

specialization of tasks is needed. The financial manager is the key persons in any business enterprise. The function of finance manager includes budgeting and investing funds, accounting, products pricing and forecasting. The financial manager is engaged in the analysis, planning and control of the financial activities of the enterprise.

FINANCING AND INVESTING: The financial manager performs the financing and investing function of an enterprise. He supervises the cash and other holding of the firm. He arranges for raising additional funds as per the requirement of the enterprise.

 

FINANCIAL ANALYSIS: Financial manager makes analysis of financial condition of the firm. Financial analysis ensures the effective and smooth functioning of any enterprise. Financial analysis is made to judge the propriety of the trend of share market prices, etc.

 

DIVIDEND DECISIONS: The financial manager takes dividend decision. For taking decisions in respect of dividend, the following factors are considered-availability of cash, tax position of the share-holders, trend of earnings, etc.

 

ACCOUNTING AND CONTROL: The financial manager arranges for the maintenance of financial records. He controls the financial activities of the enterprise. He identifies deviations from planned and efficient financial activities.

 

FORECASTING AND LONG-RUN PLANNING: The finance manager forecasts costs and technological changes. He studies the market conditions and forecasts the funds needed for investment. He calculated the estimated returns on proposed investment project and forecasts about the demand for the products of the enterprise.

 

CASH MANAGEMENT: The financial manager arranges for cash management of the enterprise. Through cash management, he ensures the supply of funds to the different dept. of the enterprise. The financial manager arranges for the adequate supply of cash to all sections of the enterprise for its smooth flow of operations.

 

DECISION REGARDING CAPITAL STRUCTURE: The financial manager takes decision regarding capital structure of the firm. Capital structure indicates the proper mix of different sources of capital. He tries to maintain proper balances between the long-run funds and shorts-run funds.

 

EVALUATION OF FINANCIAL PERFORMANCE: The financial manager evaluates the financial performance for the analysis of financial performance of the enterprise. The financial manager constantly reviews the financial performance to assess the financial health of the business enterprise. The financial manager helps the management to take different decision on the result of the evaluation of the financial performances.

Scope of Financial Management
Relationship of Finance to Economics and Accounting

Download PDF

Posted by Akash Kurup

Founder and C.E.O, World4Engineers Educationist and Entrepreneur by passion. Orator and blogger by hobby

Website: http://world4engineers.com