ROLE OF FINANCIAL MANAGER

Role Of Financial Manager

The financial manager of a firm plays an important role in the company’s goals, policies, and
financial success. The financial manager’s responsibilities include:

1. Financial analysis and planning: Determining the proper amount of funds to employ in the firm,
i.e., designating the size of the firm and its rate of growth
2. Investment decisions: The efficient allocation of funds to specific assets
3. Financing and capital structure decisions: Raising funds on as favorable terms as possible, i.e.,
determining the composition of liabilities
4. Management of financial resources (such as working capital)
5. Risk management: protecting assets by buying insurance or by hedging.

In a large firm, these financial responsibilities are carried out by the treasurer, controller,
and financial vice president (chief financial officer). The treasurer is responsible for managing
corporate assets and liabilities, planning the finances, budgeting capital, financing the business,
formulating credit policy, and managing the investment portfolio. He or she basically handles
external financing matters. The controller is basically concerned with internal matters, namely,
financial and cost accounting, taxes, budgeting, and control functions. The chief financial
officer (CFO) supervises all phases of financial activity and serves as the financial adviser to
the board of directors.