Financial Manger: The Roles Of A Financial Manager

854 Words 4 Pages
The Roles of a Financial Manager are many but their primary goal is to warrant growth of the proprietor’s wealth and to ensure maximum profit of the company. When a financial manager achieves his or her personal goals of a company, they too will be achieved, (Moyer, et al, 2008).
The decisions a financial managers makes are capital structure, working capital management and capital budgeting. A financial Manger has to decide on the type of projects that the company should undertake (Siegel & Shim, 2009). Financial managers help the company make decisions on how the company invests their funds; company has to have a diversity of real assets in order to operate successfully. Most of the company’s assets are tangible, meaning such things as machinery
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Accountancy has more legality opposed to what constitutes financial management. However, the financial structure and pecking order, does not mean that a financial manager is simply a so-called ‘glorified accountant ' (Brearley, 2003). The role of a financial manager tends to be further drawn-out and qualitative. The U.S. Department of Labor, states that as well as organizing financial data like accountants, many financial managers are spending more time developing strategies and implementing the long-term goals of their companies. Unlike accountant 's, financial manager has a more futuristic view on the company’s financial quarters of the past, and a role in determining what potential strategies will be for the company over the upcoming year, they focus on present-day and the forthcoming (Job Outlook, …show more content…
Net Present Value is the difference of present value of cash inflows and outflows; it’s used to analyze the success of an anticipated investment. The Discounted Cash Flow is used to estimate the appeal of an investment opportunity, it analysis free cash flow projections of the future. If the value attained through DCF analysis is higher than the current cost of the investment, that’s an indication of a good opportunity investment. The Weighted Average Cost of Capital is the company’s cost of capital which all of the company’s assets are respectively weighted; bonds, common and preferred stocks, and long-term debts are involved in the Weighted Average Cost of Capital calculation. The Equivalent Annual Annuity is a calculation of the annual cash flow of an annuity investment over its existence. These tools are essential for a financial manager to achieve his or her goals for a company to run efficiently.
The primary roles of a financial manager are to warrant growth of the proprietor’s wealth and to ensure maximum profits a company. They make decisions on Capital Budgeting, Capital Structure and Working Capital Management, their importance to a company is vital in order for that company’s success. Using different methods and tools such as the Net Present Value (NPV), Discounted

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