Financial Management: Evaluating Sources, Functions, & Manager Role

This report provides a comprehensive overview of financial management, emphasizing its significance in ensuring effective cash flow and resource utilization. It delves into the core concepts of financial management, highlighting its role in planning, organizing, and directing financial activities to maximize revenue generation. The report underscores the importance of financial functions, such as investment decisions and liquidity management, in supporting overall business operations and strategic decision-making. It also elaborates on the multifaceted role of a financial manager, including financial reporting, advising senior management, and maintaining strict cash flow control. Furthermore, the report discusses various short-term and long-term sources of finance, such as trade credit, creditors, financial institutions, and retained earnings, which are crucial for business continuity and growth. The analysis concludes that effective financial management, guided by skilled financial managers, is essential for achieving long-term business success and maintaining a competitive edge.

A report 1000 words

TABLE OF CONTENT
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................4

INTRODUCTION
Financial manager helps in managing the cash flow and various business accounts in
most effective manner. Furthermore, the report will highlight long and short term sources of
finance and will also cover explain the significance of Financial Management in any business
MAIN BODY
Explaining concept of Financial Management
Financial management refers to planning, organizing and directing of various financial
activities by the managers so the best utilization of resources and maximum revenues could be
generated at the workplace (Yuniningsih and et.al., 2019). Moreover, financial management of
any company is very wide and thus it includes various investment, financial and dividend
decision that had to be taken on time by the management so that grater net profits could be
generated.
Furthermore, major objectives of financial management is to ensure regular and adequate
supply of funds so that business might be able to run in smooth and efficient manner. Also,
through best financial management practices the senior managers of any business would be able
to ensure safety on the investment that is been done on various areas so that best revenues might
be collected for the same (Marshall and Schrank, 2020). Also, it is an important role of the
financial manager to estimate the total capital requirement within the workplace so that efficient
working of various business functions could be assured for the future. Thus, through best
financial management the firm is able to improve the profitability of the business and ensure the
economic stability that is needed to remain competitive across various target markets. Also, the
financial management helps to assure that chances of errors are very less and further all the
business risk could be assessed so that possible threats could be avoided for the future.
Explaining importance of financial functions within organizations.
All the finance functions helps in serving the basic purpose of providing the financial
information so that all the other business functions could operate in the effective and efficient
manner. Also, all finance functions helps in supporting the business through ensuring effective
planning and decision-making. Furthermore, these finance function provide the information
relating to how much costs is involved in the business to pay to various suppliers. Also, these
function helps in knowing the management about total amount of revenues that is been generated
within the business through conduct of various activities. Moreover, financial statements are very

much helpful in monitoring and forecasting the total cash flow within the business so based on
that certain strategic decision might be taken. Also, the break even point is also known through
various financial functions and thus based on that estimated profits than could be calculated by
the top management (Definition of Finance Functions, 2022). This, it can be said that overall
these function helps in measuring and improving business performance that is very much
required to achieve success and maintaining competitive advantage in long run. Furthermore,
various type of the financing functions like investment decision, dividend, liquidity etc. helps in
controlling the cost of the business and assure proper asset management within the workplace.
Also, these functions helps in when the business is planning to expand and diversify into various
regions and further wants to bring the innovative products and services within the business
during the specified period.
Describe role of the Financial Manager in a company
Financial manager in any company is responsible for handling various activities of the
business and the major responsibility lies in generating the financial reports so that long term
financial goals might be achieved easily. Also, they are responsible for advising the senior
managers on various opportunities identified so that current profits could be maximized.
Moreover, financial manager help in maintaining strict control over the cash flow of the business
through maintaining various financial reports so that if any deviation found that the same might
be communicated to top management for taking any corrective actions.
Furthermore, the role also lies in hands of financial manager of interpreting various
databases and financial models so that working of the organization might be clearly understood
and also errors could be found out for each of department in terms of funds they are been using
to carry out daily activities (Omobitan and Khanal, 2022). Also, it can be said that financial
manager is not responsible for specifying the budget areas but is also accountable for promoting
the improvement in various process that are been used so that long term success of the business
could be assured. Furthermore, major role of the financial manager is also implementing certain
methods, productivity and maintaining the quality standards so that positive outcome for the
business could be delivered within the short span of time.

Discussing Sources of Finance
Finance is important source of making the business run successfully over the years. Also,
there are various sources of finance through which the business could ensure the continuity.
These sources could be classified either in short or long term that are as follows:
Short term sources:
Trade credit: It is provided by the banks for specified period so that current needs of the
firm could be fulfilled in most efficient manner (Radzi and et.al., 2018)
Creditors: these are the group of people that are ready to supply certain amount of funds
along with some interests amount so that all the requirement might be fulfilled.
Long term sources:
Financial institutions: These are the well-established institutions that are ready to
provide the long term loans that have the maturity of more than the years. Also, these funds are
taken either to buy the heavy equipments or for accomplishing some long term goals.
Retained earnings: It is the net earnings or profits that are earned after paying all the
taxes, indirect costs and dividend to shareholders etc. Thus, these earning might be used for any
investment or any other purpose by the firm.
CONCLUSION
From the above report it can be concluded that financial managers help business making
success through analysing various financial data and ensures effective working in long run.
Furthermore, the report had described in detail about various sources of finance and role of
finance managers in making the business success

REFERENCES
Books and journals
Yuniningsih, Y. and et.al., 2019. Fundamental factor of financial management in determining
company values. Management Science Letters. 9(2). pp.205-216.
Omobitan, O. and Khanal, A. R., 2022. Examining Farm Financial Management: How Do Small
US Farms Meet Their Agricultural Expenses?. Journal of Risk and Financial
Management. 15(3). p.133.
Radzi, N. M. and et.al., 2018. Financial Decentralization in Malaysian Schools: Strategies for
Effective Implementation. MOJES: Malaysian Online Journal of Educational Sciences.
1(3). pp.20-32.
Marshall, M. I. and Schrank, H. L., 2020. Sink or swim? Impacts of management strategies on
small business survival and recovery. Sustainability. 12(15). p.6229.
Online
Definition of Finance Functions . 2022. [Online]. Available through:
<https://www.managementstudyhq.com/financial-function-types-importance-
objectives.html>