Essay on Types Of Decisions Financial Managers Make
There are three major decisions that financial managers have to take on a regular basis. One of them is the investments decision, the financial manager has to decide where to best invest the funds of the company. It is beneficial for the company to invest their funds to keep growing. It is important to keep in mind that financial managers have to analyze the rate of return, the risk involved, the investment criteria, the long term growth and the cash flow analysis.
Another decision that a financial manager make is decising from where to raise the money for the company, either from the owner’s fund (share capital and profit from the company) or borrow the fund( loans, bonds, debentures, etc). It is important to analyze how much of each will be use, depending on the cost, risk, cash flow, fixed operating cost, broker’s commission, etc.
The third most important decision that financial managers have to take is about the dividens, what to do with the remaining of the company’s profit after it has paid all the fixed liability, how much dividends should be given to the shareholders and how much cash to keep for the company.
2. Analyze the various ethical issues a financial manager could potentially face and how these could be handled.
When the financial manager is working based on commissions and is compensated by each transaction and not…