Role of Finance Manager

By-Prof.Binny Bhogal RawatHLCPEAhmedabad University

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

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.

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

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

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

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

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

Disinvestment and Shut down Decision regarding the disinvestment

and closure. Liquidation Sell off Merger

The expansion and diversification. Measuring investment risk versus

return. Size of the firm

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

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

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.

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