Table of Contents
Common goals of financial management
The goal of a financial manager is to keep the company or organization solvent and successful. There are several elements to this goal:
Maximize current value
The financial manager or managerial team works to maintain the highest value possible for the company’s assets. In a publicly owned company, this means maintaining the highest possible value per stock in the company.
Maintain growth
The financial manager aims to increase the company’s value over time. They help to achieve this by producing and implementing financial plans.
Maximize profit
Maximizing profit may involve locating opportunities to invest, acquire a competitor or develop new products. This can involve communications with other divisions such as marketing or research and development to create efficient strategies.
Minimize cost
As they monitor spending, a financial manager looks for opportunities to minimize the costs of doing business, such as overhead, manufacturing and distribution costs. They then communicate these potential changes to the respective management teams.
Avoid bankruptcy
Finally, the financial manager aims to keep the company solvent, meaning it has enough money to continue operations and avoid bankruptcy.