Purchase Solution

Financial managers

Not what you're looking for?

Ask Custom Question

The role of the financial manager in maximizing shareholders' value in today's financial market is described thoroughly.

Purchase this Solution
Solution Summary

Financial managers' roles are evaluated.

Solution Preview

Financial managers can hold from 10 up to several hundred different investments. These investments can be diversified across countries, asset classes, industries and companies. A "diverse" portfolio reduces the impact of any fluctuations in an investment's market value.
For example, take an individual shareholder and a financial manager with an investment universe of stocks A, B, C and D. The first investor holds $100,000 of stock C and a financial manager holds $100,000 of stocks A, B and C, equally weighted. If the market value of stock C declines by 10% then the first investor would lose $10,000, whereas the financial manager's loss would be limited to approximately $3,300 or 3.3%.
While a personal shareholder may feel that they can diversify themselves, it might be interesting to know that statistically significant diversification can only be achieved with a portfolio of over 40 stocks!
Financial managers are experienced and qualified professionals who specialise in the selection and maintenance of investments. The manager maintains extensive contacts outside the firm and has access to detailed information, which together with in-house expertise, allow it to make informed timely decisions on ...

Purchase this Solution
Free BrainMass Quizzes
Accounting: Statement of Cash flows

This quiz tests your knowledge of the components of the statements of cash flows and the methods used to determine cash flows.

IPOs

This Quiz is compiled of questions that pertain to IPOs (Initial Public Offerings)

Business Processes

This quiz is intended to help business students better understand business processes, including those related to manufacturing and marketing. The questions focus on terms used to describe business processes and marketing activities.

Learning Lean

This quiz will help you understand the basic concepts of Lean.

Situational Leadership

This quiz will help you better understand Situational Leadership and its theories.

View More Free Quizzes
Related BrainMass Solutions

  • Areas covered by non-financial measures

    413539 Financial Measures Aside to the financial measures, Managers use non-financial measures to measure performance. As Atrill and McLaney claim "Non-financial measures can help managers to cope with an uncertain environment..." Why?

  • Financial Statement Analysis and Decision Making

    I do believe that managers today understand the information and the implications of the numbers presented in the financial statements. First, a majority of managers today have post graduate educations such as MBAs.

  • Accounting: Users of managerial and financial accounting

    Stewardship is important in large businesses because the owners of the business are not the same as the managers. Hence, managers use financial accounting to increase shareholder wealth or shareholder value.

  • Understanding Financial Statements.

    These non-financial managers must be able to grasp the basic language spoken by accountants and other financial managers in order to effectively communicate. The next reason is primarily due to budget constraints within the departments.

  • Treatment of cash by accountants and financial managers

    74813 Treatment of cash by accountants and financial managers How do accountants and financial managers treat cash differently? Hello Kindly read the differences as follows 1.

  • Four Basic Financial Statements

    What types of information is provided to managers in your department and how do managers in your organization use information presented in financial statements? Dear student, What are the four basic financial statements?

  • Management vs. Finacial Accounting Mangers' Use of Info

    - budget - controlling - creditors - financial accounting - managers - management accounting - Planning - shareholders. The solution compares management vs. financial accounting managers use of information.

  • FINANCIAL MANAGEMENT

    eye on global financial issues and developments, while domestic financial managers are mostly concerned with issues affecting the domestic environment.

  • Health Care Financial Management

    Whereas managerial accounting information is aimed at helping managers within the organization make decisions. Managerial Finance is that branch of finance that provide tools for a company's financial managers.

  • Financial Planning Process / Strategic Plan

    The financial planning process is where financial managers aid an organization's department leaders in budgeting for the organization's needs for the coming year.

View More Related Solutions