Question

Reflecting on the focus and content of this course, what is an important challenge facing the financial management of organizations today, and how would you go about addressing it? Explain.

Answer 1

Challenges faced in financial management of organizations

1. Cash raising: One of the pressing issues for corporate leadership is the ability of a firm to raise cash not just for a business unit but for the entire organisation. That is the reason, that companies work in tandem with investment bankers in order to evaluate lender risk appetite.

2. Debt repayment: Once a company borrows an amount of money, it must find enough avenues where the money can be put to good use. Deploying cash on hand requires deeper understanding in business as to why one should invest in a second product while avoiding the competitors’ bullet strategies.

3. Increase revenues: Increase in revenues shows the skills and talent of department heads in leading the company to the state of financial gain. It takes brand communication and an effective marketing strategy to succeed in revenue management.

4. Financing long-term initiatives: For corporate activities, raising cash goes together with funding long-term initiatives. Generally, investors are cautious about tying up cash for a long time, especially if default risk is on the rise and the economy is performing inactively.

5. Accurate record-keeping: In corporate finance, managing it requires accurate recording of transactions. Without having the right financial data, the management won’t be able to lay the preliminary work for profit monitoring in the long run. Companies must hire the expert accountants who has the knowledge regarding the basic accounting notions of credit and debit for accurate transaction recording.

6. Correct financial statements: Having fact-based journal entries translate into financial statements that are accurate and in line with the standards in accounting. In the case of corporate executives, they often find themselves wondering how to generate summarised accounting data that follow Generally accepted accounting principles.

7. Financial data analysis: In a corporate leadership, it is unacceptable to just to look quickly at the performance data without looking at the details. In truth, summarising lengthy information and then making good use of it is one of the most challenging issues in financial management.

8. Hiring experienced employees: In order to keep up with an economy with growing competitive rivalry, a company must have a workforce that can push the firm into the market. Human resources must be able to work in tandem with business-unit chiefs in attracting top-performing and competent employees.