Name Section Date This assignment is intended to assess students\' understanding
ID: 2789062 • Letter: N
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Name Section Date This assignment is intended to assess students' understanding of the role of the financial management function in an objective driven organization Please read each question carefully before you begin to answer that question Students must show their work in the space provided on the answer sheet for all questions and explain their gnSwers Program: Banking and Finance Degree Program. Learning Goal 2: Graduates will be able to demonstrate a sound understanding of the financial management function within the business firm or in the public sector. Assessment Rubric: Objective: Students can correctly identify the primary activities of the financial manager and relate those activities to the objectives of an organization. Outcomes Exemplary Acceptable Unsatisfactory Identify and describe Student is able to list and Student is able to list andStudent might be able to list the activities of a financial manager. some activities, but is unable to describe them accurately accurately describe at least five activities. accurately describe at least four activities Student is able to explain Student is able to explain Student is unable to how at least four activities how at least three of the manager directly activities of the manager activities of the financial Explain how the activities of the financial manager contributes directly to a translates into achieving directly relates to the business or non-profit the organization's organization achieving objectives. its objectives substantively relate how the manager translate to the objectives organization achieving its organization achieving its objectives. Outcome 1 Identify and describe the activities of a financial manager. List and describe five of the major activities of the financial manager. As a hint, think of the types of decisions that the top financial managers have to make in a typical corporation. (50 points) Answer:Explanation / Answer
In order to run the organisation successfully, the financial manager has to kep discharging his/her duties in an efficient manner. They have to be far sighted enough to determine the effect of their performance on the profitability, goodwill and growth of the firm. Below are described some of the key activities of the financial manager:
A financial manager has to decide the ideal debt equity mix that will be good enough for the firm to continue in the long run. After that he or she has to decide the sources of raising the required amount and how to raise it.
His duty does not end with merely raising fund. he also has to properly allocate the amount among assets and projects as per requirement. This is a very important and difficult job involving great responsibility. Fund raising and allocation are the test of efficiency of duty discharged by a financial manager. To ensure the optimal use of funds, a financial manager should keep in mind the size of organisation and its growth rate, the duration of assets held and the mode of financing.
Earning revenue is busines's prime objective and is the mode of sustenance for business. No business can continue without earning profit for long term. Thus it is important to utilize this hard earned profit in an efficient manner to minimise wastage and continue the healthy survival of entity. Firm should also focus on minimising fixed cost to maximise the profit potential of business.
Nowadays almost all firm's sticks are traded publicly. Hence a financial manager should be well acquainted with the capital market and its operations. The prevailing market risk should be analysied by the financial manager to determine the level of risk the company can handle and to determine how much risk is involved in trading company's shares and debentures. How much loan the company will be able to pay off. The financial manager should also be able o determine how to allocate the profit, how much to distribute as dividend, whether to even distribute it or utilise it in financing investments. Therefore he needs to be of rational mind.
After all the above activites, comes the last step of evaluation of past activites and deciding on improvements. Performance evaluation can be done by financial manager with the application of variety of financial ratios such ROI, ROE, ROA, net profit ratio and also by application of several techniques such as break even analysis and budgetary control. The performance evaluation brings to light the inefficiency in firm's operation based on which the manager can decide on measures to take to improve future performance.
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