Question

The Portfolio entry should be a minimum of 250 words and not more than 750 words. Use APA citations and references if you use ideas from the readings or other sources. For this week’s portfolio activity, please advise the instructor of the following: Utilizing the information provided in your course textbook(s) or other valid sources, describe the role of the Financial Manager. In addition, explain the functions of money.

Answer 1

Financial Managers are responsible for ensuring the financial health and security of an organization. They work with senior management to analyse financial data and advise whether their ideas are financially feasible and profitable.

Their primary responsibility is to ensure that financial reports are prepared accurately and in a timely manner for internal use and regulatory purposes. They also direct investment activities, work with senior management to develop strategies and plans to fulfil the long-term goals of their organization.

The role of a financial manager can be summarised as follows:

1. Preparing financial statements, business activity reports, and forecasts,

2. Supervise employees who do financial reporting and budgeting,

3. Monitor financial details to ensure that legal requirements are met,

4. Analyse market trends to find opportunities for acquiring other companies,

5. Help senior management in financial decision making.

Financial managers also do tasks that are specific to their organization or industry. For example, bank financial managers must be experts on banking functions and the asset and liability management process, and healthcare financial managers must know about issues in healthcare finance. Moreover, financial managers must be knowledgeable of special laws, regulations and taxation rules that affect their industry.

There are many distinct types of financial managers:

Controllers direct the preparation of financial reports that summarize and forecast the organization’s financial position, such as income statements, balance sheets, and analyses of future earnings or expenses. Controllers also oversee preparing special reports required by governmental agencies that regulate businesses. Often, controllers oversee the accounting, audit, and budget departments. Treasurers and finance officers direct their organization’s budgets to meet its financial goals and oversee the investment of funds. They carry out strategies to raise capital and develop financial plans for mergers and acquisitions.

Credit managers oversee the firm’s credit business. They set credit-rating criteria, determine credit ceilings, and monitor the collections of past-due accounts. Cash managers monitor and control the flow of cash that comes in and goes out of the company to meet the company’s business and investment needs.

Risk managers control financial risk by using hedging and other strategies to limit or offset the probability of a financial loss or a company’s exposure to financial uncertainty.

Insurance managers decide how best to limit a company’s losses by obtaining insurance against risks such as the need to make disability payments for an employee who gets hurt on the job or costs imposed by a lawsuit against the company.

Money is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts, such as taxes.

Money serves the functions of a measure of value against which all other goods and services can be compared;

Money also acts as a store of value as it can be held for long periods of time and be used in the future as and when required.

Money's primary function is as a medium of exchange. This is possible as all goods and services can be measured against money, so money can be exchanged for those goods and services.

Money is also used as a unit of account. Money is used to record financial transactions and GDP is measured in terms of money.