The document outlines the key roles and responsibilities of a finance manager. It discusses that organizations often fail not due to production or marketing issues, but due to a lack of a competent finance manager. The finance manager must raise funds, make investment and forecasting decisions, manage liquidity and working capital, and make decisions around capital budgeting, dividends, cash management, risk management, and portfolio management. Additionally, the finance manager is responsible for mergers and acquisitions, valuation, international finance, taxation implications, and analyzing the financial health of the organization.

1. Role of Finance
Manager
By-Prof.Binny Bhogal Rawat
HLCPE
Ahmedabad University

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.  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.  Capital Budgeting decision.
 Dividend decision
 Working Capital management
 Cash Management
 Risk Management , Risk Diversification
 Portfolio Management

5.  Finance and Production.
 Finance and HRM
 Finance and Marketing
 Finance and R&D
 Finance and CSR

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.  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.  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. Disinvestment and Shut down
 Decision regarding the disinvestment and
closure.
 Liquidation
 Sell off
 Merger

10.  The expansion and diversification.
 Measuring investment risk versus return.
 Size of the firm

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. 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.  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. 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