Question

Financial Management

Class

Now that we are at the close of our class, how would you answer the following - What is the goal of the finance manager? Please be specific in your response. What tools, calculations, concepts, and analyses should the finance manager employ to be successful?

Answer 1

The goal of the financial manager is to maximize the rate of return of the shareholders as the primary goal of the Financial Management is shareholders wealth maximization.

The goal of financial manager is to choose the appropriate projects and choose the appropriate funding into the project which will help the company in order to maximize the rate of return so that it can help them in order to synchronise the goals of profit maximization with that of the wealth maximization of the shareholders.

There are various types of capital budgeting concepts like net present value along with internal rate of return and payback period methods and there would be various capital selection methods like net present value along with internal rate of return and payback period . There will be various capital Structure decision decided with trade off theory which will help them in order to maximize the rate of return by selecting the best project available to them

The ultimate goal of the financial manager is always the maximization of the shareholders wealth as shareholders wealth will help them in order to maximize the value of company through increase in the market capitalisation and it will also improve their chances of getting higher pay scale and commissions.