Financial Manager Essay Example | Topics and Well Written Essays - 1000 words

Financial Manager - Essay ExampleAll the trading operations of the business are initiated and supported by the monetary managers evaluations and judgments. The cost/benefit analysis, the timings of the cash flows, the sources of finance and render for liquidity are pivotal to the decision-making affect of financial management.In the context of the above, a financial managers office staff is three fold. He has to perform the functions of smashing budgeting, chief city structuring and working capital management simultaneously, providing effective lay on the line management. Thus a financial manager best serves the owners of the business (shareholders) by identifying goods and services that add harbor to the firm because they are desired and care ford in the free marketplace.Every business enters into long- name investments in anticipation of promising returns and higher growth. Such investments call for efficient assessments and effective decisions by the financial manager. This process of planning and managing a firms long-term investments is better known as capital budgeting. In capital budgeting, the financial manager tries to identify investment opportunities that are worth more to the firm than they cost to acquire. This means that the value of the cash flow from generated by an asset exceeds the cost of that asset. Evaluating the size, timing, and risk of future cash flows is the essence of capital budgeting. ... In this area two main issues face the financial manager. One is that how much should the firm suck up and two is that what are least expensive sources of funds for the firm. The capital structure (or financial structure) refers to the specific concoction of long-term debt and equity the firm must use to finance its operations. In addition to deciding on the support mix, the financial manager has to decide exactly how and where to raise the coin. The expenses associated with raising long-term financing is a considerable factor. Theref ore different possibilities have to be carefully evaluated. Businesses borrow money from a human body of lenders in a number of different ways. Choosing among lenders and among loan types is another job handled by the financial manager. A financial manager is also responsible for everyday financial activities and for the working capital management. Managing the firms working capital is a day-to-day activity that ensures the firm has sufficient resources to continue its operations and avoid costly interruptions. The term working capital refers to a firms short-term assets, such as inventory, and its short-term liabilities, such as money owed to suppliers. The working capital management involves a number of activities related to a firms receipt and disbursement of cash. The financial manager must plan for and respond to matters as to the amount of cash and quantity of inventory to be kept on hand, should credit be allowed on sales to customers and which sources should be used for sho rt-term financing as and when the need arises. The above three functions of financial management are very broad and sole(prenominal) a brief overview of each category is given. By