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Role of finance manager

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Role of finance manager

  1. 1. Role of Finance Manager By-Prof.Binny Bhogal Rawat HLCPE Ahmedabad University
  2. 2.  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
  3. 3.  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.
  4. 4.  Capital Budgeting decision.  Dividend decision  Working Capital management  Cash Management  Risk Management , Risk Diversification  Portfolio Management
  5. 5.  Finance and Production.  Finance and HRM  Finance and Marketing  Finance and R&D  Finance and CSR
  6. 6.  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
  7. 7.  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
  8. 8.  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
  9. 9. Disinvestment and Shut down  Decision regarding the disinvestment and closure.  Liquidation  Sell off  Merger
  10. 10.  The expansion and diversification.  Measuring investment risk versus return.  Size of the firm
  11. 11. 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
  12. 12. 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
  13. 13.  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.
  14. 14. 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

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