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Unlike a bookkeeper or accountant, a financial manager, often known as a chief financial officer, plans long-term financial strategy for a company, delegating bookkeeping work to lower-level staff. Financial Control. A financial manager needs to evaluate different sources of funds. The funds procured by the financial manager are to be prudently invested in various assets so as to maximise the return on investment: While taking investment decisions, management should be guided by three important principles, viz., safety, profitability, and liquidity. The management can raise finance from various sources like equity shareholders, preference shareholders, debenture- holders, banks and other financial institutions, public deposits, etc. How to open bank account online instantly? For each type of decision, give an example of a business transaction that would be relevant.• There are three types of financial management decisions: Capital budgeting, Capital structure, and Working capital management.• The financial manager makes estimates of funds required for both short-term and long-term. Finance manager of a company has to make decisions regarding cash management. A financial manger is a person who takes care of all the important financial functions of an organization. Financial managers are responsible for the financial health of an organization. Financial managers focus on cash flows, the inflows … Sufficient funds must be available for purchase of materials, payment of wages and meeting day-to-day expenses. Financial management functions are vital for managing financial resources. They produce financial reports, direct investment activities, and develop strategies and plans for the long-term financial goals of their organization. What is considered in financial risk management? Financial management is concerned with the acquisition, financing and management of assets with some over all goals in mind. 8 Functions of a Financial Manager (Management) 1. The finance function is also concerned with the decisions such as business nature, size of the firm, type of machinery used, use of debt capital, liquidity position and so on. The other techniques of financial control and evaluation include budgetary control, cost control, internal audit, break-even analysis and ratio analysis. This will depend on several determinants like probable costs and expected profits and upcoming programs and policies of the company. 6 Major Scopes of Financial Management – Explained! All-Purpose Financial Statement: A record of financial activity that is suitable for a variety of users to properly assess the financial health of a company. 2. Before publishing your articles on this site, please read the following pages: 1. View Homework Help - Assignment 1.docx from FIN 2010 at CUHK. Chapter 1: 1. Financial management is a continuous and interrelated process which involves identifying the required amount of capital that is needed for running the business promptly, evaluating and selecting best alternative sources of funds, allocating the funds according to the need of business area and distributing earned profits. There are three responsibilities of the financial manager in connection with direction of the flow of funds as per plan: 1. Then the net profits decision has to be taken by the finance manager of the company. It also requires setting targets for overhead and production expense levels and debt-service management. Evaluation the need for increased (reduced) productive capacity and (iii) determining the additional … Related Careers : Compare the job duties, education, job growth, and pay of financial managers … The Financial Management Decision Process. Procurement of Funds 5. …, 10 best free budget software for monitoring …, What is the 7Ps marketing mix? Estimating the Amount of Capital Required:. Selec­tion of assets in … Financial management is an essential action for any organization to manage financial resources. Basically, the functions of a financial manager can be categorized into three main functions. Should the managers of the company Determining Capital Structure:. Choice of Sources of Funds 4. How are they related? He should also protect the assets engaged in the business to ensure the best use of the resources. (iii) modernisation and expansion of business. Disposal of Profits or Surplus 7. Following are the main functions of a Financial Manager: Raising of Funds In order to meet the obligation of the business it is important to have enough cash and liquidity. Once the requirement of capital funds has been determined, a decision regarding the kind and proportion of various sources of funds has to be taken. Financial Management is one of the areas of finance which deals with the management of all the financial resources of the organization for the smooth functioning of the organization’s goals. What are the three major functions of the financial manager? The basic concept of finance comprises capital, funds, and amount. Best free budget software to control finances, 10 best ways to collect start up business loans (2020). Lease Finance: Type, Advantage and Disadvantage of Leasing. The functions of Financial Manager are discussed below: This is the foremost function of the financial manager. Every decision taken by financial managers is concerning investing and financing. The financial manager takes steps to procure the funds required for the business. It might require negotiation with creditors and financial institutions, issue of prospectus, etc. The financial planning aspect of the job includes setting goals for achieving specific revenues, profit margins and gross profits. Financial Management means planning, organizing, directing and controlling the financial activities such as procurement and utilization of funds of the enterprise. This is done to achieve minimum cost of capital and maximise shareholders wealth. It is the duty of a financial manager to lessen the tax liability of the business. Financial goals of their organization process requires a huge amount of assets by! Both short-term and long-term plans for the next time I comment involve investing in share or bond, purchasing equipment. Duties include preparing financial reports, direct investment activities, and develop strategies and plans for the time. Accounting period it involves forecasting the cash inflows and outflows to ensure that there is shortage... And plans for the next time I comment complicated situations from which the funds required for short-term! 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