role of finance manager
TRANSCRIPT
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Role of Finance Manager
By-Prof.Binny Bhogal RawatHLCPEAhmedabad University
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THE HISTORY OF FAILURES OF ORGANISATIONS IS INTERESTING. MANY FIRMS HAVE FAILED, NOT BECAUSE OF INEFFICIENCY OF PRODUCTION, INABILITY IN MARKETING OR NONAVAILABILITY OF FUNDS BUT DUE TO THE ABSENCE OF COMPETENT FINANCE MANAGER
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Finance Manager has to find out from where can raise the fund.
Finance Manager has to think about the investment decision.
Finance Manager has to make financial forecasting.
Finance Manager has to maintain the liquidity position of the firm.
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Capital Budgeting decision. Dividend decision Working Capital management Cash Management Risk Management , Risk Diversification Portfolio Management
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Finance and Production. Finance and HRM Finance and Marketing Finance and R&D Finance and CSR
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Merger and acquisition Valuation of share and the assets International Finance Management Implication of Govt taxation, interest
policy Understanding the role of intermediaries
in finance
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Analyzing the financial health of the organization
Preparing Budget for production, marketing and finance deptt.
Managing payment and receivable. Framing the credit policy. Deciding regarding the source of
finance Depreciation and replacement decision
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Hedging and insurance decision. Decision regarding the risk coverage. Decision regarding the investment and
the return Analyzing, interpreting and forecasting
after going through the accounting record
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Disinvestment and Shut down Decision regarding the disinvestment
and closure. Liquidation Sell off Merger
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The expansion and diversification. Measuring investment risk versus
return. Size of the firm
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Objective of the Firm and Approach Profit maximization versus wealth
maximization Finance Manager has to think about the
short term and long term objective if the firm
Finance Manager has to decide the capital structure
Finance manager think about the optimum utilization of the resource for the desired goal, or efficiency and effectiveness
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Various Decision Making Investment decision or long term asset-
mix decision• Finance decision or capital-mix decision• Liquidity decision or short-term asset
mix decision• Dividend decision or profit allocation
decision
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Maximization of firm’s value. Shareholder’s value maximization Dividend, retention and re-investment
decision. Liquidity and profitability are conflicting
decision Risk and returning decision.
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Finance manager role in Current Time Understanding the implication of corporate social
responsibility with respect to profitability. Decision on the optimum size of the firm Decision on stock option , perquisites and bonuses. Understanding and applying the modern financial
instruments such as factoring, derivative, credit derivative, securitization and venture capital.
Transfer pricing Understanding the Time Value of Money