Some of the primary functions of a financial manager are as follows: 1. Estimating the Amount of Capital Required 2. Determining Capital Structure three. Choice of Sources of Funds 4. Procurement of Funds five. Utilisation of Funds 6. Disposal of Profits or Surplus 7. Management of Cash eight. Financial Control.
Financial Manager is the government who manages the financial matters of a commercial enterprise.
The capabilities of Financial Manager are discussed beneath:
1. Estimating the Amount of Capital Required:
This is the foremost function of the monetary supervisor. Business corporations require capital for:
(i) buy of fixed assets,
(ii) meeting operating capital necessities, and
(iii) modernisation and enlargement of commercial enterprise.
The monetary manager makes estimates of price range required for each short-time period and long-time period.
2. Determining Capital Structure:
Once the requirement of capital finances has been determined, a decision regarding the kind and proportion of numerous resources of finances needs to be taken. For this, economic supervisor has to determine the proper mix of equity and debt and brief-term and lengthy-time period debt ratio. This is finished to gain minimum fee of capital and maximise shareholders wealth.
3. Choice of Sources of Funds:
Before the actual procurement of budget, the finance supervisor has to decide the sources from which the price range are to be raised. The management can raise finance from various resources like fairness shareholders, preference shareholders, debenture- holders, banks and other economic institutions, public deposits, etc.
four. Procurement of Funds:
The financial supervisor takes steps you acquire the funds required for the commercial enterprise. It would possibly require negotiation with lenders and economic establishments, issue of prospectus, and so forth. The procurement of finances relies now not handiest upon fee of raising budget however additionally on other factors like trendy marketplace conditions, choice of investors, authorities policy, and so forth.
five. Utilisation of Funds:
The budget procured by means of the economic manager are to be prudently invested in various property so one can maximise the go back on investment: While taking funding decisions, control ought to be guided by means of three vital ideas, viz., protection, profitability, and liquidity.
6. Disposal of Profits or Surplus:
The economic supervisor has to decide how a whole lot to maintain for ploughing again and what kind of to distribute as dividend to shareholders out of the income of the agency. The elements which influence these decisions encompass the fashion of income of the company, the trend of the marketplace fee of its shares, the necessities of price range for self- financing the future programmes and so forth.
7. Management of Cash:
Management of coins and different current assets is an crucial task of monetary supervisor. It involves forecasting the coins inflows and outflows to make certain that there is neither scarcity nor surplus of cash with the company. Sufficient funds should be to be had for buy of materials, charge of wages and assembly day-to-day prices.
8. Financial Control:
Evaluation of monetary overall performance is likewise an critical function of financial supervisor. The ordinary degree of assessment is Return on Investment (ROI). The different strategies of economic manage and evaluation consist of budgetary manipulate, cost manipulate, internal audit, destroy-even evaluation and ratio analysis. The economic supervisor have to lay emphasis on financial making plans as nicely.