Question

Briefly explain the three major tasks of the financial manager. Be sure to use examples that are original to your answer. Having discussed task of a financial manager now we can skip to the forms of Business Organization. There are three different legal forms of organization; Sole proprietorship, partnership and corporation. Here the critical part is the form of liability in case the firm busines organization goes out of business. Sole proprietorship is owned by a single person. Partnership is owned by two or more individuals and a corporation is separate entity from its owners and has rights, obligations as an actual person would have.

Answer 1

The three major tasks of the financial manager are

A financial manager is a person who is responsible to perform finance functions in an organization

Task1: Funds raising

When the firm decides to expand or reorganize or diversify its operations, then the financial manager is called upon to raise funds.

Example: Recently Avenue Supermarkets promoted by Radha Krishna Damani decided to raise funds,

this responsibility was given to its financial manager. The company was successful in raising the required funds.

Task2: Funds Allocation

The financial manager in his role he/she has to allocate the funds efficiently to maximize the firm's profitability in turn to maximize the wealth of the shareholders.

Task3: Profit Planning

It refers to the operating decisions in the areas of pricing, costs, volume of output and firm's selection of product lines. It is therefore, a prerequisite for optimizing investment and financing decisions.

Conclusion:

Though the business is sole proprietor, Partnership or Corporation the tasks of financial manager remain same.

The liability of the business is with the owners of the firms and not with the agents of the business.