Final answer:
Financial managers are pivotal in managing a company’s financial assets, acquiring capital, and long-term financial planning. They use financial statements, budgeting, and investment appraisal techniques as tools to meet their responsibilities. These roles are essential for ensuring a company's growth and financial stability.
Step-by-step explanation:
Roles and Responsibilities of Financial Managers
Financial managers within a company are responsible for several critical areas to ensure the financial health and growth of an organization. First, they are responsible for investment strategies and managing financial assets. This includes making decisions about capital investments like purchasing new equipment or property that will produce returns over time. Second, financial managers handle the acquisition of financial capital. They can secure funding through means such as issuing stocks or bonds, which facilitates outside investment from entities like shareholders or bondholders. Third, financial managers focus on long-term financial planning, which involves forecasting future revenues, costs, and profits to inform the company’s strategy.
To accomplish these goals, financial managers use a variety of tools. Financial statements and ratio analysis provide insights into the company's performance and financial health. Budgeting helps in planning and controlling costs, while investment appraisal techniques like net present value (NPV) and internal rate of return (IRR) aid in evaluating the viability of long-term investment projects. Additionally, they may rely on financial institutions such as finance companies, life insurance companies, mutual funds, pension funds, and real estate investment trusts to manage assets and liabilities effectively.