Financial managers must maintain an understanding of legal and regulatory issues when planning, forecasting, analyzing, and evaluating the appropriate steps to grow the firms bottom line (Byrd, J., Hickman, K., & McPherson, M., 2013). Whether the existing market structure is perfect or monopolistic competition, oligopoly, or a monopoly, the financial manager has the task of understanding and analyzing the difficulties that each market structure poses. This paper will analyze the challenges a financial manager will encounter and incorporate how liquidity, competitiveness, and efficiency affects financial managers.
Financial Manager Challenges
Besides gathering, analyzing, and translating data, financial managers and the finance department as whole must also be able to present the data they collect and analyze. In the article titled “Challenges for Financial Managers in a Changing Economic Environment” author Livia Ilie posits that responsibilities that once focused on financial planning budgeting now require strategic evaluations and professional communication of this information to subordinates and managers. Ilie (2015) stated, “The CFO has to be able to express in simple words what is behind the complex data analysis the finance department is making available” (p. 729). It is equally important to process and present the data as it is to explain to peers, subordinates and executives what the information means. This places a CFO or financial manager in the position as both a leader of peers and subordinates as well as a member of the executive team. Ilie recognized financial managers face many challenges related to changes in the role of a companies finance operation.
Miller, Yeager, Hildreth, and Rabin (2005) authors of...
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... structure, a financial manager must find ways to make their company stand out from others to remain profitable.
Efficiency
Efficient operations, especially, financial operations are important to manage as a company evaluates its competition and pricing. If product demand is not properly manage a firm could risk overproducing or under producing products. This would result in excessive or deleted stock and in either situation, additional cost.
Conclusion
Financial managers confront numerous challenges in their role as well as in various market structures. Regardless of the market structure, market liquidity, competitiveness, and efficiency are challenges that a financial manager will need to adapt to successfully. Despite the challenges, financial managers take pride in their involvement with executing plans and watching a company grow through challenging times.
Gerald, J. M., Samuel, J. Y., W, B. H., & Rabin, J. (2005). How financial managers deal
We currently live in an extremely turbulent financial climate. With major firms being wiped out by the crisis, it is clear that the dynamics of the financial industry are constantly changing to give way to more resilient systems. The quest to understand this transformation motivates me to further my academic pursuit and hence apply to MSc in Accounting and Finance at the Stockholm School of Economics.
Financial and Managerial accounting are used for making sound financial decisions about an organization. They provide information of past quantitative financial activities and are useful in making future economic decisions. (Albrecht, Stice, Stice, & Skousen, 2002) The same financial data is used to derive reports for each accounting process yet they differ in some ways. Financial accounting primarily provides external reports for external users such as stock holders, creditors, regulating authority and others. (Garrison, Noreen, & Brewer, 2010) On the other hand Managerial accounting is concern with providing information that deals with the internal viability of the organization and is tailored to meet the needs of an individual organization. (Albrecht, Stice, Stice, & Skousen, 2002)
According to the conceptual framework, the potential users of financial statements are investors, creditors, suppliers, employees, customers, governments and agencies, and the general public (Financial Accounting Standards Board, 2006). The primary users are investors, creditors, and those who advise them. It goes on to define the criteria that make up each potential user, as well as, the limitations of financial reporting. The FASB explicitly states that financial reporting is “but one source of information needed by those who make investment, credit, and similar resource allocation decisions. Users also need to consider pertinent information from other sources, and be aware of the characteristics and limitations of the information in them” (Financial Accounting Standards Board, 2006). With this in mind, it is still particularly difficult to determine whom the financials should be catered towards and what level of prudence is necessary for quality judgment.
in the similar manner, Hill, & McShane, (2008), argued that managers remain the most important asset of the business that drives the business towards path of development and growth. Additionally, the importance of managers, their roles and functions cannot be neglected. As the business environment has become highly competitive with market segments highly fragmented forcing business entities to adopt and integrate effective business practices that can ensure that the business is heading towards the path of competitive advantage. In this regard, it is realized that the role and function of manager has become highly indispensable. The early theory of management, as per stated by Need, (2006), argues that the core functions of manager are to Plan, Organize, Staffing, Leading, and Controlling. Augier, & Teece, (2009), within this regard stated that effective and efficient managers do not just go and perform haphazardly, in fact, good and effective managers discover their strengths, ensure they are making the most out of the existing resources and mastering the above mentioned five basic functions. The overall role of manager is highly significant, mainly because of the fact that manager while performing these five functions guide the entire business and
The life of a financial advisor can be challenging as it can also lead to success. Financial advisors are the top producers in their organizations in the form of client funds and need to contain their emotions in order to be successful (Weisinger, 2004). This is important as it allows the employee have a positive attitude that improves the company’s future outlook. The occupation of a financial advisor requires daily adjustments as each day is different.
It should be pres... ... middle of paper ... ... o monitor the health of the company and also to make the right choices. They are the most important users of financial information as without this group using the information properly the company could cease to survive. Bibliography Biz/ed 2004, Accounting [Online], available http://www.bized.ac.uk Duncan Williams 2004, User of Financial Statements, [online], available http://www.duncanwill.co.uk Finance Demon 2004, User of Financial Information, [online], available http://www.financedemon.co.uk Financial Reporting Council 2004, About the FRC [online], available http://www.asb.org.uk Hacker Young Chartered Accountants 2004, Accounts Explained [online], available http://www.account-explained.co.uk Joe Corbett 2004, Class Notes, Borders College, Galashiels
Block, Hirt (2005). Foundations of Financial Management (Chapter 9) (11ed.). McGraw - Hill Companies. New York.
Depending on the type of organization of industry financial managers can hold different titles i.e. controller, finance officer, credit manager, cash manager, and risk and insurance manager.
In order for any company to succeed there are a lot of things that require to be done. Looking at McDonalds’s, you will realize that the management has put a lot efforts to ensure that the company has incorporated managerial economics in its operation. This is one of the reasons why the company has attained great success that most other companies have not been able to. There are different topics within a company that can determine how managerial economics is incorporated in a company. Spear Company limited is a company that deals with production of clothes and it has been operation since 1990. The company has borrowed a lot of its managerial issues from McDonalds’s. To bring this issues well let us look at how the company
Maintaining a company’s financial assets is a daunting task. Cash management techniques and short-term financing provide accounting executives with the tools needed to survive the constant changes within the economy. The combination of these tools and the knowledge of the world economy will assist companies in maintaining current assets and facilitates growth.
So as a result working capital management is also given the least importance. So later they come to know the importance of the working capital management in managing the profitability and growth of the firm. And the poor managing of this working capital management is indeed one of the major reason for the cause of business failure.
I am currently majoring in Finance Management. Most of the time people think of finance as just managing money. However, finance is needed for so much more! The finance industry deals with starting businesses, developing new products, expanding markets, as well as everyday things like saving for retirement, purchasing a home, and even insurance. The stock market, asset allocation, portfolio analysis, and electronic commerce are all key aspects in finance. In this paper, I will explain how these features play a vital role in the industry, along with the issues that come with these factors.
This paper will define and discuss five financial theories and how they impact business decisions made by financial managers. The theories will be the Modern Portfolio Theory, Tobin Separation Theorem, Equilibrium Theory, Arbitrage Pricing Theory (APT), and the Efficient Markets Hypothesis.
Never have I ever climbed a mountain peak. As a child, I imagined myself conducting expeditions in deep-frozen pathways, leading amateur explorers to the top of the world, and instructing rookies in surviving harsh blizzards. Even though slightly altered, my childhood dream has been achieved. I led a team of fellow classmates, in my Strategic Management course, to the success summit of a financial competition. Over the course of a semester, I and my teammates were supposed to create and manage a company of the IT industry, in a computer-simulated environment, along with other four rival teams. I dealt with strategy and financial matters of our virtual enterprise, while my colleagues were working on marketing and manufacturing. During the four months of the exercise, I have experienced finance from various aspects: capital budgeting, through selecting favorable investment for upcoming quarters; debt management, by assessing the necessary amount and efficiency of loans; profitability analysis and dividend policy, which had been used to compile the company’s general performance index. Working in a multinational team, which included an American, a Norwegian and a Moldovan, strengthen my negotiations skills, as well as flexibility and cooperation. But above all, this experience intensified my passion for finance. Of course, a pleasant bonus was the fact that, in the end, our company’s financial performance was six times the performance of second-best team.