In financial management, finance manager is chief authority. Not only
to raise the finance of business, finance manager will also do many other works
for business. Following are the main roles of financial manager.
Raising Funds of Company:
Finance manager analyze different sources of business. He didn’t get fund from
all sources. Initially, he checks his requirement in short term and in long
term and after this he choose best source of fund. He has also authorized to
change the capital structure of company for giving more benefit to company.
Taking Maximum Benefits from Leverage:
Finance manager uses both financial and operating leverage and try to practice
it for taking supreme benefit from leverage.
International Financial Decision:
Finance manager search’s opportunities in international financial
decision. In these opportunities, he does the contracts of credit default swap,
currency swap and interest rate swap.
Investment Decisions:
Finance manager analyze the net present value (NPV) of each investment project
before actual investment. Net present value of project means what net profit at
discount rate, will business gets if business invests him money in that
project. High NPV project will be accepted. Therefore, due to high
responsibility, role of finance manager in this regard is very important.
Risk Management:
Risk occurrence means facing different losses. Finance manager is very thoughtful on risk and its management. He plays significant role to find new and new techniques to control risk of company. Similar to other parts of management, he estimates all his risks, he organizes the employees who are accountable to control risk. He also computes risk adjusted NPV. He meets all risk controlling organizations like rating agencies, insurance companies, at pervasive level. He is able to change company's misfortunes into fortunes. By good estimations of adverse situations, he attempts his best to safeguard the investment of company.
February 23, 2017