Question

The role of the financial manager

Instructions:

In this discussion forum, you will discuss the role of the financial manager and the main decisions they have to face in order to fulfill the mission of the company they manage. After reviewing the required study material, briefly discuss the following question:

Of the three managerial decisions faced by the financial manager in his administrative role, which one do you understand adds the most value to the firm and why?

In stating your answer, you should:

• Identify and analyze the three main decisions that the financial manager faces as part of his administrative functions within the company.
• State and explain if these decisions are aimed at maximizing the wealth of the shareholders or owners of the company, regardless of whether they are for-profit or non-profit companies.
• Argue if any of these three decisions has a greater impact on the success of the firm and the maximization of shareholders' profits.
• Justify your point of view by presenting examples.

Answer 1

The three major decisions that a financial manager takes are

• Fianancial Decisions
• Investment Decisions
• Operating Decisions

A company survives and grows based on these decisions. decisions regarding the ways of raising the finance and their effective utilization and investing the amount which bears higher return and decreasing the operational expenses to increase the operational profit these shows a major impact on increasing the wealth of the shareholders and also have a greater impact on the success of the firm and also maximising the share holder's profit.