Modern Financial Management Case Study

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THE MODERN VIEW OF FINANCIAL MANAGEMENT
With increase in complexity of modern business situation the role of a finance manager is not just confined to procurement of funds, but his area of functioning is extended to judicious efficient use of funds available to the firm, keeping in view the objectives of the firm and expectations of the providers of funds. In view of modern approach, the finance manager is expected to analyze the firm and to determine the following:
a) The total funds requirement of the firm.
b) The assets to be acquired, and
c) The pattern of financing the assets.
The Finance Manager of a modern business firm will generally involved in the following three types of decisions — (I) Investments decisions (II) Finance decisions …show more content…

(iii) Considerations of possible requirements of funds by the firm for expansion and diversification proposals for financing existing business requirements.

CHANGING ROLE OF FINANCE MANAGERS IN PRESENT SCENARIO

Traditional Approach—Procurement of Funds
Modern Approach—Effective Utilization of Funds

The emphasis of Financial Management has been shifted from raising funds to the effective and judicious utilization of funds. The modern approach is analytical way of looking into the financial problems of the firm. Finance manager has to consider both traditional as well as modern role to run the business smoothly, then only business can survive for a long period of time, also organization can fulfill their objectives. Following are the changing role of finance managers in present scenario:
1. Funds raising
2. Funds allocation
3. Profit planning
4. Liquidity decisions
5. Business forecasting
6. Responsibility to shareholders
7. Responsibility to employees
8. Responsibility to Creditors
9. Responsibility to

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