Course Title: Strategic Finance: Submitted By: Qasim Farooq 1252108

Course Title: Strategic Finance
MBA 1 EVENING
Date: September 10, 2013
Submitted By: Qasim Farooq 1252108
The Financial Managers and the Firms

Financial Manager: Financial manager is a person responsible for the supervision and handling of the financial affairs of an organization. A finance manager organizes and manages an organization's or an individual's financial portfolio. They also prepare financial reports, oversee investments and help with cash management. The financial manager is responsible for budgeting, projecting, cash flows and determining how to invest and finance projects. The Role of Financial Managers: The finance manager is responsible for knowing how much the product is expected to cost and how much revenue it is expected to earn so that s/he can invest the appropriate amount in the product. The financial manager must not just be an expert at financial projections; s/he also must have a grasp of the accounting systems in place and the strategy of the business over the coming years. The structure of the company varies, but a financial manager is responsible for the same general things across the board. The manager is responsible for managing the budget. This involves allocating money to different projects and segments so that the business can continue operating, but the best projects get the necessary funding. The manager is responsible for figuring out the financial projections for the business. The development of a new product, for example, requires an investment of capital over time. The finance manager is responsible for knowing how much the product is expected to cost and how much revenue it is expected to earn so that s/he can invest the appropriate amount in the product. The finance manager will use data analyses and educated guesses to approximate the value, but it's extremely rare that s/he can be 100% sure of the future cash flows. The finance manager uses a number of tools, such as setting the cost of capital(the cost of money over time, which will be explored in further depth later on) to determine the cost of financing. At the same time that this is going on, the financial manager must also ensure that the business has enough cash to pay upcoming financial obligations without hoarding assets that could otherwise be invested. This is a delicate dance between short-term and long-term responsibilities. A financial manager is responsible for providing financial advice and support to clients and colleagues to enable them to make sound business decisions. Specific work environments vary considerably and include both public and private sector organisations, such as multinational corporations, retailers, financial institutions, NHS trusts, and charities, manufacturing companies, universities and general businesses. Financial considerations are at the root of all major business decisions. Clear budgetary planning is essential for both the short and long term, and companies need to know the financial implications of any decision before proceeding. In addition, care must be taken to ensure that financial practices are in line with all statutory legislation and regulations. Financial managers may also be known as financial analysts or business analysts.
Functions of corporate Financial Manager: Planning The financial planning aspect of the job includes setting goals for achieving specific revenues, profit margins and gross profits. It also requires setting targets for overhead and production expense levels and debt-service management. The financial manager needs to create a master budget thats tied to the companys balance sheet, accounts receivable and payable reports and cash flow and profit-and-loss statements. The financial manager conducts regular reviews of the master budget, called budget variance analyses, to determine if any changes should be made based on the actual performance of the company vs. its financial projections. Financial managers also determine the best investment options for a businesss excess cash and review ways to acquire capital for expansion or acquisitions. Cost Containment A key responsibility of a financial manager is to control the companys expenses. This requires more than simply setting spending levels and cutting costs. Cost containment includes creating requests for proposals, bidding processes and purchasing policies for contractors, vendors and suppliers to ensure the company gets the best combination of quality and price. The financial manager sets benchmarks that determine when its most cost effective to perform activities using in-house staff and when its better to use contractors. Cash Flow Management One of the most important functions of a financial manager is to project and manage the companys cash flow. Cash flow refers to the actual receipt of money and payment of bills, as opposed to the companys budgeted income and expenses. Assuming that because a business has more income than expenses it can pay its bills can lead to disaster. Legal Compliance The corporate financial manager ensures the business meets all of its legal obligations, such as sales and income tax payments; employee benefits contributions; state and federal labour wage requirements; and Securities and Exchange Commission reporting, if the company is a public corporation.

Course Title: Strategic Finance: Submitted By: Qasim Farooq 1252108

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Course Title: Strategic Finance: Submitted By: Qasim Farooq 1252108

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Course Title: Strategic Finance

Date: September 10, 2013

Submitted By: Qasim Farooq 1252108

The Financial Managers and the Firms

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