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The Role of Financial Management in a Firm

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Examine the role of management as it relates to finance in a corporation. In your post, discuss the role of management by addressing the following prompts:
-Explain the various aspects of finance that management must understand.
-Describe why a manager needs to understand the characteristics and importance of financial markets including their liquidity, competitiveness, and efficiency.
-Interpret the function of the Financial Balance Sheet in assisting in management's decision making process.
-Discuss what could happen if management does not fulfill responsibilities related to finance. Share a real world example from your own professional experience or from an external source.

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The role of financial management in a firm are determined.

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Management of any organization must understand following aspects of finance:

(i) Investment decisions: It's very important for the management to understand the investment decisions. Which project is profitable and how it would add value to the shareholder's wealth can be decided only when the management of the company understands the investment decisions.

(ii) Financing decision: If management is able to find out the profitable projects, the next action would be to find ...

Solution provided by:
Jayant Kumar, MBA
Education
  • MBA, Indian Institute of Finance
  • Bsc, Madras University
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