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FINANCIAL MANAGER RESPONSIBILITIES - Coggle Diagram
FINANCIAL MANAGER RESPONSIBILITIES
Investment
decisions
A successful company usually has rapid growth in sales, which requires investment in plans, equipment and inventory.
FM is responsible for deciding how to invest the company’s funds for expending its business.
It is a task of FM to:
determine sales growth rate
determine what specific assets to purchase
identify whether the investment is necessary
Financial analysis and planning
The main of financial analysis is to identify the firm’s strengths and weaknesses. The company will then be able to improve its performance and remain competitive in the industry.
Based on the forecast and interaction with other executive, the FM will lay plans, which will shape the company’s future. As FM they must have to deal with wide variety of plans, such as production plans, financial plans, marketing plans and personnel plans.
FM must able to forecast the company’s future performance through company’s past and present performance as well as other factors such as economic performance, customer’s preference and future demand for their products
Monitoring and controlling
All business decisions have financial implications, and all managers financial and otherwise need to take this into account
Decisions of other departments might affect investment decisions
FM have to interact with other departments within the organization to ensure that the company is operated as efficiently as possible
Financing decisions
As FM , they need to determine the best method of financing those assets: whether to use debt (long/short term) or use equity (common stock / preferred stock)
FM also responsible on how to obtain funds for investment
Incremental cash flows
Incremental cash flow is about predicting the future cash flow of a business if it takes on a new project. It helps management determine if a project is worth doing or not. If the cash flow will increase, it is a positive incremental cash flow. However, it is a negative cash flow if cash flow will decrease.
Incremental cash flow can be a good tool to assess whether to invest in a new project or asset, but it should not be the only resource for assessing the new venture.
As the FM, he need to identify incremental cash flows of the project
Involvement in financial market
He will also have to foster relationship with creditors (bank loan officers), stockholders, investors, underwriters of equity and bond issuers and government regulatory bodies
The FM must deal with the money and capital markets to obtain financing either through the money market or capital market. He may have to decide on investing excess or idle funds in the financial market.