Question

role of financial management ​

Answer 1

Finance involves the evaluation, disclosure, and management of economic activity and is crucial to the successful and efficient operation of firms and markets.

Managerial Finance

Managerial finance concerns itself with the managerial significance of finance. It is focused on assessment rather than technique. For instance, in reviewing an annual report, one concerned with technique would be primarily interested in measurement. They would ask: is money being assigned to the right categories? Were generally accepted accounting principles (GAAP) followed?

Corporate Finance

Corporate finance is the area of finance dealing with monetary decisions that business enterprises make and the tools and analysis used to make those decisions. The primary goal of corporate finance is to maximize shareholder value. Although it is in principle different from managerial finance, which studies the financial decisions of all firms, rather than corporations alone, the main concepts in the study of corporate finance are applicable to financial problems of all kinds of firms.

The Role of Financial Managers

Overview

Financial managers perform data analysis and advise senior managers on profit-maximizing ideas. Financial managers are responsible for the financial health of an organization. They produce financial reports, direct investment activities, and develop strategies and plans for the long-term financial goals of their organization. Financial managers typically:

Prepare financial statements, business activity reports, and forecasts,Monitor financial details to ensure that legal requirements are met,Supervise employees who do financial reporting and budgeting,Review company financial reports and seek ways to reduce costs,Analyze market trends to find opportunities for expansion or for acquiring other companies,Help management make financial decisions.