Role of the Financial Manager Paper
Introduction Shareholders own companies and are therefore entitled to a return on their investments when the companies are performing well. It becomes the financial managers ' role to ensure that shareholders are receiving a maximum return on their investment. This project will concentrate on defining the different roles and objectives of financial managers in their attempt to maximize shareholder value. Furthermore, the viewpoint of stockholders will also be compared to those of financial managers with regards to maximization of shareholder value.
Maximizing Shareholder Value In today 's competitive global environment, financial managers are continually faced with the ability to engage in
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Some individuals with large shareholdings may try to influence company policies. However, from the outside, without an accepted official position, little can be accomplished in spite of considerable effort if management is not persuaded (Kouskoula, 1998). From a shareholder 's viewpoint, not having any influence on companies may lead to conflicts of interest. For instance, shareholders could fear that some managers may seek to use the shareholder 's money for their own personal gains. When faced with such principal-agent problems, it becomes the role of senior management to find ways to motivate everyone else in the company. At that point, senior management become the principals and junior management and other employees are their agents (Brealey et al., 2005). Shareholders maintain a perspective of a growing company in order to receive a return on their investment, therefore increasing their value. Their viewpoints could be considered more narrowly personally beneficial on a financial aspect than the viewpoints of a financial manager.
Conclusion The main goal of financial managers is to maximize shareholder value. Besides being strategy implementers, their role also includes finding ways to increase the firm 's capital budgeting, financing, and net working-capital activities. Furthermore, financial managers need to maintain
b. As a financial manager, my focus would be on improving the firm’s cash flow and cash return on investments by determining which units in the business are generating or depleting the firm’s cash.
The financial manager establishes goals that will help to reach the organizations objectives, then creates steps in which they will use to achieve those goals.
This situation can lead to negative consequences for a business when its executives or management direct the organization to act in the best interest of themselves instead of the best interest of its owners or shareholders. Stockholders of the enterprise can keep this problem from arises by attempting to align the interest of management with that of themselves. This normally occurs through incentive pay, stock compensation, or other similar incentive packages that now cause the managers financial success to be tied to that of the company (Garcia, Rodriguez-Sanchez, & Fdez-Valdivia, 2015; Cui, Zhao, & Tang, 2007; Bruhl, 2003; Carols & Nicholas,
The primary role of finance is to plan for, acquire, and use resources to maximize the efficiency and value of the enterprise.
The financial mangers goal is acquisition, financing, and management of assets. The challenges are investment, financing, and asset management decisions.
Financial Management is an important aspect of how a business operates efficiently. The way that the finances are controlled can determine how successful the company is. The finances of a business allows for the growth of the company. The five practices of financial management: capital structure decision, investment appraisal techniques, dividend policy, working capital management and financial performance assessment are critical when assessing a company. The performance of a company plays a key role on how successful the company is on meeting goals. There are different strategies and tools that a company can implement and if they are used to effectively the company can meet their goals. If a company has good finances, a good
Adolescence is a difficult time for both parents and the teenagers. And the pressure can be overwhelming. Due to poor teen-parent relationship teenagers faces failure in life. This issue is very common in our society. Anne Tyler and Joyce carol have written short stories in which similar scenario is depicted. Anne Tyler’s focus in this story is the gradual disintegration of the relationship between a teenage boy and his parents.
Earthquakes are a nationwide hazard. When considering earthquakes today, most Americans assume major earthquakes only threaten areas such as California, over the San Andreas Fault, but few realize there are at least four active seismic zones across the United States. According to seismologists, all of these zones have delivered historic earthquakes, and any of them could awaken and strike again at any time. The New Madrid Seismic Zone (NMSZ) is the most active earthquake region in the United States east of the Rocky Mountains. The New Madrid Fault lies in America’s Heartland, stretching from St. Louis, Missouri to Memphis, Tennessee. Whereas fault lines in California are at or near the surface to be studied, the active faults in the NMSZ are
The primary objective of the manager is to please the stockholder by maximizing stockholder wealth.
Financial Management: “The process for and the analysis of making financial decisions in the business context.” (Cornett, Adair, & Nofsinger, 2016, p. 5).
Murder is the unlawful killing of another human being with an intentional or criminal intent. In today's world, terrible crimes are being committed daily. Many believe that these criminals deserve one fate: death. Capital punishment, the death penalty, is the maximum sentence used in punishing people who kill another human being - and is a very controversial method of punishment.
REFERENCES•Ross, S.A., Westerfield, R.W., Jaffe, J., Jordan, B.D. "Modern Financial Management". McGraw-Hill, Eighth Edition, (2008)•R.A. Brealey and S.C. Myers, "Principles of Corporate Finance", McGraw-Hill, Seventh Edition, (2003).
Describe the duties of the financial manager in a business firm. Financial managers measure the firm's performance,
“Corporate finance theory, teaching and the typically recommended practice at least in the US are all built on the premise that the primary goal of a corporation should be the maximization of shareholder value.”
Managers and shareholders are the utmost contributors of these conflicts, hence affecting the entire structural organization of a company, its managerial system and eventually to the company's societal responsibility. A corporation is well organized with stipulated division of responsibilities among the arms of the organizational structure, shareholders, directors, managers and corporate officers. However, conflicts between managers in most firms and shareholders have brought about agency problems. Shares and their trade have seen many companies rise to big investments. Shareholders keep the companies running