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ROLE OF FINANCE MANAGER

The role of financial manager is central in the flow of flow of money from investors into the firm and then ac! to those same investors" There are two ma#or decisions for the financial manager to ma!e that greatly affect this $rocess" In fact% they are central to the s&ccess or fail&re of the com$any as a whole" The ca$ital &dgeting decision as!s how m&ch money the com$any sho&ld invest and into what assets sho&ld this investment e made" The financing decision determines how the cash for the investment will e raised" The com$any raises money y selling sec&rities" 'realey% Myers and Marc&s e($lain that )these $ieces of $a$er have val&e eca&se they are claims on the firm*s real assets and the cash that those assets will $rod&ce" For e(am$le% if the com$any orrows money from the an!% the an! has a financial asset" That financial asset gives it a claim to a stream of interest $ayments and to re$ayment of the loan" The com$any*s real assets need to $rod&ce eno&gh cash to satisfy these claims"+ ,F&ndamentals of Cor$orate Finance% $"-./ The flow of money thro&gh the financial manager is also set &$ y 'realey% Myers and Marc&s" )The flow starts when financial assets are sold to raise cash" The cash is em$loyed to $&rchase the real assets &sed in the firm*s o$erations" Later% if the firm does well% the real assets generate eno&gh cash inflow to more than re$ay the initial investment" Finally% the cash is either reinvested or ret&rned to the investors who contri &ted the money in the first $lace"+ ,F&ndamentals% $" -0/ If the an! lends money to the firm% the firm m&st of co&rse then re$ay the money $l&s any interest accr&ed" Investments can e made into anything from $hysical goods% li!e e1&i$ment or new $rod&cts% or it can e invested into ideas li!e a mar!eting $lan" An investment is made with the ho$e that it will $rovide res&lts in the f&t&re% the financial manager m&st e aware of what !ind% how many and how soon the enefits will start to come in from the investment" One of the most common method of raising money is to invest investors to $&t &$ the cash and offer them a share of the f&t&re enefits" The re$ayment can e done with stoc! shareholding or sim$le cash% may e even a com ination of the two" The ig ideas are a $art of the financial manager*s role% &t they are also in charge of $roviding the cash for the wee! to wee! o$erations" The manager also needs to assess and diff&se all ris!s that may h&rt the com$any"

ROLE OF FINANCE MANAGER

Encyclo$edia"com e($lains the role of an acco&ntant as )The acco&ntant eval&ates records drawn &$ y the oo!!ee$er and shows the res&lts of this investigation as losses and gains% lea!ages% economies% or changes in val&e% so as to reveal the $rogress or fail&res of the &siness and also its f&t&re limitations and $ossi ilities" Acco&ntants m&st also e a le to draw &$ a set of financial records and $rescri e the system of acco&nts that will most easily give the desired information2 they m&st e ca$a le of arriving at a com$rehensive view of the economic and the legal as$ects of a &siness% envisaging the effect of every sort of transaction on the $rofit3and3loss statement2 and they m&st recogni4e and classify all other factors that enter into the determination of the tr&e condition of the &siness ,e"g"% statistics or memoranda relating to $rod&ction2 $ro$erties and financial records re$resenting investments% e($endit&res% recei$ts% fiscal changes% and $resent standing/" Cost acco&nting shows the act&al cost% over a certain $eriod of time% of $artic&lar services rendered or of articles $rod&ced2 y this system &n$rofita le vent&res% services% de$artments% and methods may e discovered"+ ,encyclo$edia"com/ Role of the Financial Manager The financial manager and the acco&ntant are very im$ortant reso&rces for each other% $roviding information that the other needs and also eing a le to wor! together to ma!e informed decisions% $artic&larly a o&t investment o$$ort&nities and the day3to3day o$erations of the organi4ation" The main difference etween the financial manager and the acco&ntant lies in the word )com$rehensive+" The acco&ntant is re1&ired to follow the r&le oo! to an a sol&te and $rovide the most honest and relia le financial information as $ossi le" The financial manager is afforded the o$$ort&nity to ta!e ris!s% even ma!ing decisions ased on a )g&t feeling+" That may e a it e(treme% as any smart financial manager wo&ld cons&lt all so&rces% $artic&larly the acco&ntant% to decide on a feasi le and strong investment o$$ort&nity" '&t they are allowed to ta!e a chance" The role of ma(imi4ing shareholder val&e is one that can e shared y the financial manager and acco&ntant" 'oth $ositions sho&ld e% if not foc&sed on% at least concerned with ma(imi4ing the shareholder*s val&e and &ltimately ma(imi4ing the val&e of the com$any"

ROLE OF FINANCE MANAGER

The acco&nting $roced&res and statements are generally followed in the methodology that wo&ld est enefit the com$any" The acco&nt information will also need to $rovide the most acc&rate and hel$f&l information to assist the finance manager in any decisions" As with any other de$artment in the com$any% the acco&nting de$artment $lays an im$ortant $art in the decision ma!ing and investment ma!ing $rocess" The role of financial manager is central in the flow of flow of money from investors into the firm and then ac! to those same investors" There are two ma#or decisions for the financial manager to ma!e that greatly affect this $rocess" In fact% they are central to the s&ccess or fail&re of the com$any as a whole" The ca$ital &dgeting decision as!s how m&ch money the com$any sho&ld invest and into what assets sho&ld this investment e made" The financing decision determines how the cash for the investment will e raised" The com$any raises money y selling sec&rities" 'realey% Myers and Marc&s e($lain that )these $ieces of $a$er have val&e eca&se they are claims on the firm*s real assets and the cash that those assets will $rod&ce" For e(am$le% if the com$any orrows money from the an!% the an! has a financial asset" That financial asset gives it a claim to a stream of interest $ayments and to re$ayment of the loan" The com$any*s real assets need to $rod&ce eno&gh cash to satisfy these claims"+ ,F&ndamentals of Cor$orate Finance% $"-./ The flow of money thro&gh the financial manager is also set &$ y 'realey% Myers and Marc&s" )The flow starts when financial assets are sold to raise cash" The cash is em$loyed to $&rchase the real assets &sed in the firm*s o$erations" Later% if the firm does well% the real assets generate eno&gh cash inflow to more than re$ay the initial investment" Finally% the cash is either reinvested or ret&rned to the investors who contri &ted the money in the first $lace"+ ,F&ndamentals% $" -0/ If the an! lends money to the firm% the firm m&st of co&rse then re$ay the money $l&s any interest accr&ed"

ROLE OF FINANCE MANAGER

Investments can e made into anything from $hysical goods% li!e e1&i$ment or new $rod&cts% or it can e invested into ideas li!e a mar!eting $lan" An investment is made with the ho$e that it will $rovide res&lts in the f&t&re% the financial manager m&st e aware of what !ind% how many and how soon the enefits will start to come in from the investment" One of the most common method of raising money is to invest investors to $&t &$ the cash and offer them a share of the f&t&re enefits" The re$ayment can e done with stoc! shareholding or sim$le cash% may e even a com ination of the two" The ig ideas are a $art of the financial manager*s role% &t they are also in charge of $roviding the cash for the wee! to wee! o$erations" The manager also needs to assess and diff&se all ris!s that may h&rt the com$any" Encyclo$edia"com e($lains the role of an acco&ntant as )The acco&ntant eval&ates records drawn &$ y the oo!!ee$er and shows the res&lts of this investigation as losses and gains% lea!ages% economies% or changes in val&e% so as to reveal the $rogress or fail&res of the &siness and also its f&t&re limitations and $ossi ilities" Acco&ntants m&st also e a le to draw &$ a set of financial records and $rescri e the system of acco&nts that will most easily give the desired information2 they m&st e ca$a le of arriving at a com$rehensive view of the economic and the legal as$ects of a &siness% envisaging the effect of every sort of transaction on the $rofit3and3loss statement2 and they m&st recogni4e and classify all other factors that enter into the determination of the tr&e condition of the &siness ,e"g"% statistics or memoranda relating to $rod&ction2 $ro$erties and financial records re$resenting investments% e($endit&res% recei$ts% fiscal changes% and $resent standing/" Cost acco&nting shows the act&al cost% over a certain $eriod of time% of $artic&lar services rendered or of articles $rod&ced2 y this system &n$rofita le vent&res% services% de$artments% and methods may e discovered"+ ,encyclo$edia"com/

ROLE OF FINANCE MANAGER

Role of the Financial Manager The financial manager and the acco&ntant are very im$ortant reso&rces for each other% $roviding information that the other needs and also eing a le to wor! together to ma!e informed decisions% $artic&larly a o&t investment o$$ort&nities and the day3to3day o$erations of the organi4ation" The main difference etween the financial manager and the acco&ntant lies in the word )com$rehensive+" The acco&ntant is re1&ired to follow the r&le oo! to an a sol&te and $rovide the most honest and relia le financial information as $ossi le" The financial manager is afforded the o$$ort&nity to ta!e ris!s% even ma!ing decisions ased on a )g&t feeling+"

That may e a it e(treme% as any smart financial manager wo&ld cons&lt all so&rces% $artic&larly the acco&ntant% to decide on a feasi le and strong investment o$$ort&nity" '&t they are allowed to ta!e a chance" The role of ma(imi4ing shareholder val&e is one that can e shared y the financial manager and acco&ntant" 'oth $ositions sho&ld e% if not foc&sed on% at least concerned with ma(imi4ing the shareholder*s val&e and &ltimately ma(imi4ing the val&e of the com$any" The acco&nting $roced&res and statements are generally followed in the methodology that wo&ld est enefit the com$any" The acco&nt information will also need to $rovide the most acc&rate and hel$f&l information to assist the finance manager in any decisions" As with any other de$artment in the com$any% the acco&nting de$artment $lays an im$ortant $art in the decision ma!ing and investment ma!ing $rocess"